No. of Recommendations: 54
On the front page of today's (April 6, 2004) Wall Street Journal, there is an article about marketing to senior citizens. What really struck me from the article was the table titled "Gray Means Green" in the article. I've grabbed the data off the table and formatted it "Fool Friendly", below:
Median net worth for U.S. households by age as of 2000

With Home Excluding
Age Equity Home Equity
75 and older $100,100 $19,025
70-74 $120,000 $31,400
65-69 $114,050 $27,588
55-64 $112,048 $32,304
45-54 $ 83,150 $23,525
35-44 $ 44,275 $13,100
34 and younger $ 7,240 $ 3,300
Source: U.S. Census

The shape of the curve really doesn't surprise me. What shocks me are the low values of households' net worth in general. Unless pensions, annuities, IRAs, 401(k)s and other such things are not counted as part of Net Worth, those numbers are shockingly low.

I ran the numbers... If a person saved $30 a month (~$1 per day) at a 4% interest rate, for forty years (from age 25 to age 65), at the end that person would have $35,458.84. That's higher than the highest net worth (excluding home equity) median age bracket. On a dollar a day, in a 'safe' investment. Take on a little risk and shoot for a 7% return, and that end result turns into a whopping $78,744.40. Invest that buck a day in 'the market' at a 10% long run return, and the forty year balance turns into $189,722.39. Something must be terribly wrong if the savings rates are that low, and have been that low for that long.

Maybe things were different, thirty or forty years ago. Maybe people believed that Social Security would last... Maybe people believed that their pensions were sacred. Maybe - but that can't explain all of the low numbers, otherwise the people in the younger demographic groups would have higher net worths as the flaws in the social net (Social Security, PBGC, etc.) have been uncovered and it became more clear that individuals would need to be in charge of their own retirement savings goals. And it certainly doesn't explain the under 34 age bracket and its household, non-home-equity net worth of about one year's Roth IRA contribution. I'm embarassed for my age group!

In any event, once I got past the shock, the numbers made me thankful. Quite thankful. Thankful that I found the Fool, learned about money, learned about saving, and learned about investing. I would not like to be 65 years old, facing the choice of either a dog-food style retirement or the possibility of working until I keel over, and have less than $35,000 in savings. Fortunately, thanks to learning the Time Value of Money in our twenties and making the early sacrifices necessary to use that to our advantage, the chances are quite slim that our golden years will be spent on an IAMS diet.

Unfortunately, there are apparently plenty of other Americans out there who haven't yet gotten Foolish. It's unfortunate, because old-age poverty is practically totally preventable. Sure, there may always be a few unfortunate souls who slip through the cracks, but the medians should be higher - much higher. On a dollar saved a day, they should be higher! So how do we get the word out? How do we create a nation of Fools? Because the numbers right now scare me. With the governmental 'safety nets' stretching to their limits and in danger of collapsing under the weight of their own largesse, and with the abysmally low savings rate in this country, the situation is not sustainable. Something has got to change, and it has got to change soon.

So let's figure out a way to turn the country into a nation of Fools!

-Chuck
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Hi Chuck -

An excellent post. I saw the same article in the Online Editon of the Wall Street Journal, but didn't make the connection that you made.

As to answering your charge: So let's figure out a way to turn the country into a nation of Fools!; I would argue the best way for us to do this is person-by-person.

Find 1 or 2 people and convert them to Foolishness. Sit down with your best friend and ask them, how are you going to survive when you are 65. Start with your children as soon as they are born, and when they are 14 get them to set up Roth IRAs.

And instead of a dollar a day, but away 3 dollars a day and be prepared to share half of them with someone in need when you are 65.

Yours,

Jordan
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What shocks me are the low values of households' net worth in general.

I saw a tabulation similar to that one over a decade ago and it struck me then that when we savers/investors reach the time that we might enjoy the fruits of our frugality we'll probably be taxed into submission so the government will have something to pass to those short-sighted spenders. While I understand and agree with TMFJordan's point:

And instead of a dollar a day, but away 3 dollars a day and be prepared to share half of them with someone in need when you are 65.

...I believe it'll turn out to be government-imposed, other-than-voluntary "sharing."

KennyO
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Hi KennyO -

It is possible you will be right, and it will be: government-imposed, other-than-voluntary "sharing."; but in either case, I will be sharing with those that have less than I do.

I hope that I will never choose to be the ant that makes fund of the grasshopper. Rather, I want to try and teach the grasshopper how to prepare for the worse, but if he doesn't listen, I want to be there with the resources to help him.

Yours,

Jordan
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No. of Recommendations: 19
And it certainly doesn't explain the under 34 age bracket and its household, non-home-equity net worth of about one year's Roth IRA contribution. I'm embarassed for my age group!

Well, they don't exactly state where they've started that '34 and younger' bracket. I mean, if they're starting with infants or high schoolers, that's going to skew those numbers way down. So don't be completely embarrassed - it might be misleading group size. ;-)

I wish I could pretend surprise, but I really can't. I'm in that 34-44 range, and yeah - that's about where I think most of my friend group is, net-worth-wise. One of the things I've been noticing (with alarm) is the exponential rise in mortgaging their future for stuff now. Credit cards, car loans, and refinancing their homes "with cash out" every single time the newspaper reports a surge in home prices in our area.

It'll be hard to convert the whole country. We're up against a lot of really good marketing agencies who have a much sexier message. We may find “save now, before you're OLD” a thrilling tag-line, but most people will prefer something more like, “Plus, the 2005 model has swirlies in the stick shift knob!”.

I've had the best success with good old communication, plain and simple. Just chatting about stuff, and not being embarrassed (much) to say it like it is. There's a lot of stuff I “can't afford” because I'm busy trying to rebuild here. I've got major net worth rebuilding to do after a near-death experience with consumer debt. Just talking about it seems to be a great way to help other people see the sense in it.

Not everybody is going to leap into Fooldom. In fact, I think most people won't. But at the very least, maybe we can get a few people to peer through the fence at us, take a chapter or two out of our book and at least hesitate a moment to ponder life after today for a minute.

Onward!
Tamarian
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I hope that I will never choose to be the ant that makes fund of the grasshopper. Rather, I want to try and teach the grasshopper how to prepare for the worse,...

To mix allegories a bit, teaching a pig to sing wastes your time and annoys the pig.

Those grasshoppers who presume entitlement without responsibility and without lifting a finger are going to need government thugs to pry my hard-earned savings out of my clenched fists. Congress will provide the aforementioned thugs.

...but if he doesn't listen, I want to be there with the resources to help him.

If he doesn't listen, there's somebody else in a comparable predicament who will, and that's who I'm inclined to help. If you give money to a spendthrift you're giving alcohol to a wino. That's no charity. Throwing good money after bad makes no more sense in charity than it does in investing. If that tags me as cynical, so be it.

KennyO
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One of the things I've been noticing (with alarm) is the exponential rise in mortgaging their future for stuff now. Credit cards, car loans, and refinancing their homes "with cash out" every single time the newspaper reports a surge in home prices in our area.


My fiancee's sister and her husband just bought their first condo. They got a good deal as it was previously his grandmother's before she passed away. Something like 20% below market value. What's the first thing they did? Home equity loan, vacation, new furniture, and a new car. The money comes too easy, and people don't think of the consequences!

My fiancee wants to know how we can get a "home equity free" as she calls it!

I'm not sure how to educate people, I think what I need is the starting point, as I often try to start at a level that is too high for them. This is the same person who last year only paid $400 in taxes, and this year didn't have to pay any taxes at all (got $500 back). She honestly thinks she hasn't paid any taxes.

Fiancee: "What about what they take out of your paycheck each month?"
Her Sister: "But I did my taxes and I didn't have to pay anything..."

Cameron
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Maybe things were different, thirty or forty years ago. . . . . .but the medians should be higher - much higher.

Absolutely!

It'll be hard to convert the whole country.
This is soooooooooooooo accurate.

Haven't time to elaborate on this right now, but since this a values board I will be back to explain the following in terms of values, signicant emotional events, and children live what they learn.

"Everyone is 100% correct from his or her own frame of reference. If I think this is a beautiful day because the sun is shinning and there is a fresh breeze, I am right. If someone else says it is a terrible day because we are in a drought and we need moisture, that person is also right, also. The trouble is we are both right and we are confused by our disagreement."

We do not all hear things the same way.

Decisions are based on values, and not everyone agrees on the underlying value.

The reasons for a decision are as important as the decision itself.

Values run deep. People will die for their values. You cannot just look at people and see what their values are. We are not in full agreement on our values, even if we are basically nice people and want to do a good job. Core values do not change unless a significant emotional event occurs.

Later,

Ro
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First, great post!

There is one thing I would point out though.

I ran the numbers... If a person saved $30 a month (~$1 per day) at a 4% interest rate, for forty years (from age 25 to age 65), at the end that person would have $35,458.84.

True, if one saved $30 per month nominally. You are not accounting for inflation here though, so that $30 in the first month some 40 years back would be, at 3% average inflation, much closer to $100 in today's dollars. Assuming a nominal 4% interest rate and average 3% inflation rate, that makes the inflation-adjusted return rate only 1%, which means that to get to $35.5K at the end of 40 years one would have to have saved closer to $60 per month in today's dollars to get there. Still, though, your point is the same. $2/day is still less than a lot of us spend at Starbucks on the way into work.

How do we create a nation of Fools?

A good question. I don't know about creating a nation of Fools, but this one Fool was created by watching, and learning from (both via example and by purposeful instruction) my parents.

Teach your children well.

Regards,

Eldrehad


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An excellent post, babyfrog (and others!).

One thing I've been thinking of lately is... what if we had a nation of LBYM Fools?

Who would buy the Lexuses? (Lexi? Lexusi?)
Who would buy the $600 shoes?
Who would eat out enough to Panera, Burker King, <insert 5 star restaurant here>?
AND DEAR GOD, WHO WOULD DRINK COFFEE AT STARBUCKS?

What would the economy of such a world look like...

hmmm.
-dinoczar
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So let's figure out a way to turn the country into a nation of Fools!

Remove "Shop" and "Home Ec" from the school curiculum and insert "Personal Finances". Make it a mandatory course that talks about everything from what everything means on a paycheck to what an IRA/RRSP is and the power of compounding interest. Make it a madatory class. Have people that have gone bankrupt come in and explain the issues they faced.

It might not save a lot of people but at least the next generation will be more knowledgable.

Simon
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dinoczar,
Who would buy the Lexuses? (Lexi? Lexusi?)
Who would buy the $600 shoes?
Who would eat out enough to Panera, Burker King, <insert 5 star restaurant here>?
AND DEAR GOD, WHO WOULD DRINK COFFEE AT STARBUCKS?


I'm not worried about that. Seriously. Unless 'saved' money is stuffed under mattresses, it is still a productive part of the economy. If it gets sent to banks, it helps lower the interest rates that get charged for loans, thereby making expansion easier. If it gets invested directly in companies, it helps the companies expand more cost effectively.

Additionally, nearly universally, the people I've seen who are struggling to make ends meet have credit card debt that carries interest. The interest payments do not represent new consumption, nor the payoff of old consumption (that's the principal repayment part). The interest payments represent the cost of borrowing money for the right to pay "tomorrow" for something consumed "yesterday". I daresay that in the absence of credit card interest payments, many of these folks could actually afford to increase their consumption, while still living within their means. It's one thing to take on a loan to pay for a house you expect to live in and use for years to come. It's another thing to take out a loan to pay for a night on town, and end up with a financial hangover that lasts for years to come.

On the flip side, as people age, the need to save reduces, and the more people have saved up by the time they need to start living off their assets, the more they can comfortably spend. It only make sense that a population of octogenarian millionares would spend more than an equivalent population of octogenarian paupers...

Between the natural redeployment/reinvestment of saved or invested capital, the ability to consume more in the present if not paying for the consumption of the past, and the increased spending allowed by having more money to spend in the future, I don't see the economic meltdown would result from improving savings. If everyone started stuffing cash under their mattress, then I'd see a problem.

-Chuck
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I'm not worried about that. Seriously.

Whew. You make some good points, and I think I'm fully behind converting the nation to Fools now, without any reservation.

My only quibble is with this comment:

If everyone started stuffing cash under their mattress, then I'd see a problem.

I believe you're forgetting the enormous surge in mattress purchases that would result. ;)

Let the full scale indoctrination begin!
-dinoczar


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<<<<Remove "Shop" and "Home Ec" from the school curiculum and insert "Personal Finances">>>>>>>>>>>>>> I went to H.S. back in the Dark Ages and am surprised to hear these are still being taught.
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Hi All -

My High School had a required course in Consumer Education, not as good as what is outlined here. I had been interested in investing and finance, etc., prior to this course, but it did give me an opportunity to educated others.

How? Well, I did a report on Andrew Tobias' The Only Investment Guide You Will Ever Need! and had an extended section on stock investing.

I presented it to the class and the teacher. Of course, I was shocked when I got it back and she said, "Great job! But I would liked to have heard about how I could and should invest in gold and commodities!"

I took her aside after class and explained that these weren't good investments. But she still wanted to invest in them...

Yours,

Jordan
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Good thread going. Have any of you asked your parents how their retirement is shaping up? I'm 38 and my 50-something parents are going to be in trouble. My wife's parents are probably going to skim by (67 and 70) but they should have a lot more.

I've introduced my half-siblings and neice/nephew (early 20's, teens) to early investing by starting a DRiP account for them each in KO ($10/mo min.) I hope it sinks in.

ab

P.S. I ran this line by LBYM'ers, "the chances are quite slim that our golden years will be spent on an IAMS diet" and they suggest that if in this position, Ol' Roy is less expensive and adequately nutritious.
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Fiancee: "What about what they take out of your paycheck each month?"
Her Sister: "But I did my taxes and I didn't have to pay anything..."


<wham>

The sound you have just heard was brought to you by my forehead hitting my keyboard. I've had this same conversation a few times. Or another one I love: Well, I claim zero deductions because that way, I get free money at the end of the year.

B-b-b-b-b-but...

<sigh>

Never mind.

Onward!
Tamarian
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I ran the numbers... If a person saved $30 a month (~$1 per day) at a 4% interest rate, for forty years (from age 25 to age 65), at the end that person would have $35,458.84. That's higher than the highest net worth (excluding home equity) median age bracket. On a dollar a day, in a 'safe' investment. Take on a little risk and shoot for a 7% return, and that end result turns into a whopping $78,744.40. Invest that buck a day in 'the market' at a 10% long run return, and the forty year balance turns into $189,722.39. Something must be terribly wrong if the savings rates are that low, and have been that low for that long.

Unfortunately, those sums have to be adjusted for about an 80% loss of buying power(last 40 years), meaning that at 4% interest you would have(in today's dollars) 7000$, at 7% 10000$, and at 10% 38000$.
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Fiancee: "What about what they take out of your paycheck each month?"
Her Sister: "But I did my taxes and I didn't have to pay anything..."


This is exactly the reason that people support the "tax the rich" philosophy. They actually don't think they pay any taxes themselves.

My solution (totally unworkable of course) is to eliminate withholding altogether. Just send them a bill January 31, due and payable on April 15.

Maybe then they'd get it.
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Rather, I want to try and teach the grasshopper how to prepare for the worse, but if he doesn't listen, I want to be there with the resources to help him.


You are a much better person than I am. If I told someone that falling off a cliff is dangerous, and showed them how dangerous by tossing over an egg, then too dang bad when they wann'a jump off the cliff.
I feel absolutely no responsibility to save them (ie - install railings, pass laws, set up guards, etc.) I especially do not feel the need to rush them to the hospital.

Now, if you were saying that the person was pushed over the cliff, or the wind and rain knocked them over the cliff...that is a completely different story.

Buffy (who takes his responsibility seriously and feels others should too...)
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What would the economy of such a world look like...

Not sure about the economy, but people probably wouldn't be as obese and the air would have a much more breathable aspect to it.

Buffy (who seems to be getting all moral here...)
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Unless 'saved' money is stuffed under mattresses, it is still a productive part of the economy. If it gets sent to banks, it helps lower the interest rates that get charged for loans, thereby making expansion easier.

Actually, the Irish government would disagree with you. There is a tax on savings accounts...for real. And, this very same idea has been forwarded in a Federal Reserve paper last year. They wanted to stamp your money, the stamp was good for something like 1 yr and then you had to pay to have it restamped.
Very scary stuff and gov'ts seem to think its a good idea.

Buffy (who was in Ireland and was surprised by all the tarrifs and taxes...)
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Hi ab,

I'm old enough to be your Dad (just mind you!) and I am shocked by these statistics especially as this is household income and not individual.

Fortunately we seem to be well ahead of our peer group. About that "Dad" thing Ab - forget it we're spending your inheritance before we pop off!

Regards
Philip
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Enjoyed the post. There was a survey on retirement and savings in the March 27,2004 "The Economist" but unfortunately most of it is unavailable online for free. A little is.

http://economist.com/surveys/showsurvey.cfm?issue=20040327

Some stats

--a 65 year old woman has almost 20 years of life expectancy but a 31% chance of living to 90.

--Prudential asked people how much they thought they would need to live on. The average was 32,500 a year. Half of the people had no idea what you would need to save to have that income in retirement. The other half guessed on average about 200,000 dollars--a figure way too low.

--By the late 1990s about 85% of private pension plan contributions went to 401ks and similar plans. 58% had nothing else.

--26% of eligible participants fail to join a 401k.

--Fewer than 10% of participants contribute the maximum.

--Most invest badly with nearly half putting all their savings into equities or none at all.

--17% of all plans are invested solely in the shares of the employer.

--25% of workers that move jobs do not reinvest in another plan with their new employer.

Still, The Economist says that MIT and others have studies that 401ks have generally been a greeat success if used properly. They find that employees save roughly twice as much with a 401k as a defined benefit plan.

Alot of this is available at TMF of course anyway.
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Hi Buffy -

This assumes that the party in question had the same education and background as you and me. The fact is that they don't.

Assume a world were everyone has to take "Foolish Financial Education" to graduate from High School, then my story might change.

That said, if someone is in need, I will give them something. Not for them along, but for myself. I don't want my heart to grow hard and to be lacking in compassion.

When I go into San Francisco, I take change in my pocket. I give to each person that asks from me until I run out. Do I believe they will all use it well? Nope, in fact I know some of it goes to booze. But the reality is I don't know who does and doesn't buy booze, and if I don't give, it requires I harden my heart.

Now, do I take a lot of change? Nope, just a few dollars worth.

Yours,

Jordan
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One of the things I've been noticing (with alarm) is the exponential rise in mortgaging their future for stuff now. Credit cards, car loans, and refinancing their homes "with cash out" every single time the newspaper reports a surge in home prices in our area.

While I'm here there was, imo, a very good article in The Economist on that topic that is available for free. Mr. Greenspan, among others, are encouraging that mortgaging of the future at an incredible rate and one has to wonder how long that can go on and how it will turn out.

Moreover, compared with 1999, a bigger slice of those capital gains has, in effect, been turned into cash by households borrowing against the higher value of their homes. Total household debt increased by more than $900 billion last year, almost twice as much as in 1999. Mr Richebächer claims that America is experiencing the biggest credit bubble in history: total debt (public and private) has increased by a hefty $6.5 trillion since 2000.

http://www.economist.com/finance/displayStory.cfm?story_id=2461875
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This is exactly the reason that people support the "tax the rich" philosophy. They actually don't think they pay any taxes themselves.

Or perhaps realize how easy it can be to suddenly become one of "the rich." Or how low that "rich" bar can be lowered.

I was shocked to find myself classified as "the rich" one year. Especially since, well, I didn't suddenly acquire rich-stuff, like a mansion or a Mercedes or even a stinkin' yacht. There I was, in a stinkin' little two bedroom cave without so much as a working stove - rich. (And unable to deduct a dime for my housing, to add insult to injury...)

Onward!
Tamarian
...that vented, I surely wouldn't mind being "rich" again...
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I agree with the posts before on the need for greater financial education in schools. As mentioned before, classes such as Home Ec and Shop, although useful, are nowhere near as useful as a class in personal finance. The need for a required class in finances in high school is much greater today than ever before with the increasing availability of debt for young people. Acquiring debt, though, is not the only issue at hand. Young adults have problems with the basics of maintaining a checking account. For instance, my sister just graduated from high school last year and over the past month or two has apparently gotten herself a negative balance of nearly $600 in her checking account because she never keeps on eye on its balance and overcharges it. Although I have tried to instill in her some essentials, she never lets it sink in. I'm still in college right now and have several friends who are in the same boat and spend money on things completely unnecessary (like a monitor for their computer with three separate screens so they can watch tv and do their homework at the same time -- still wondering if the homework is ever getting done though). This thread has encourage me to write to my state legislators on the need for a required finances class, probably in the sophomore or junior year of high school. I would encourage everybody to do likewise. Below, I've listed some interesting links on aspects of this issue. Thanks.

http://www.asec.org/media/pr658.pdf

www.nefe.org/news/news093003.html

http://www.ncee.net/about/survey2002/NCEESurvey2002webB.pdf (note that an education in economics isn't necessarily the same as an education in personal finance)
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One of the things I've been noticing (with alarm) is the exponential rise in mortgaging their future for stuff now. Credit cards, car loans, and refinancing their homes "with cash out" every single time the newspaper reports a surge in home prices in our area.

While I'm here there was, imo, a very good article in The Economist on that topic that is available for free. Mr. Greenspan, among others, are encouraging that mortgaging of the future at an incredible rate and one has to wonder how long that can go on and how it will turn out.


Hmm, I can understand to a point why some might welcome strong consumer spending in a recession and early recovery. Japan's personal savings rate as I recall was about 20% (a number pulled from a vague memory). Japan may be just starting to be emerging from a decade+ long recession.

On the other hand I also dimly recall hearing Mr. Greenspan voicing concern about the percentange of Personal Debt as a percentage of GDP.

ee
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Or perhaps realize how easy it can be to suddenly become one of "the rich." Or how low that "rich" bar can be lowered.

Exactly. I was a measly old government worker, working without a contract for 4 years. When the contract settled, the retroactive pay made me "rich." I escaped the AMT by the skin of my teeth.

Retired January 1, 2004. Accumulated time payout made me "rich" again.

Cap
no Benz in the driveway of my 2 bedroom apartment either
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The need for a required class in finances in high school is much greater today than ever before ...

...and the need for classes in foraging, snaring, tanning and firestarting is less than ever before. An academic barrage of good tools and advice will hold little to no sway with students who are instilled with their parents' attitudes toward money, savings and security. For those already so-inclined it can be great but by the time they reach high school you won't bring many others around to your way of thinking.

The schools already have so many imposed mandates that they have far too little time to teach "reading and writing and 'rithmetic." I, not cynically, would rather see sufficient effort expended teaching the little darlin's how to write a coherent paragraph. (A position I maintain in full knowledge of just how far offbase I am WRT education.)

JMHO
KennyO
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The crash of the bubble, irrational exuberance, RS screens during the crash among many things already mentioned has to be part of the reasoning for these net worth numbers...let's see Enron, Tyco, Global Crossing........Mutual Funds.....

I'm sure there are millions of people who's net worth was reduced by obscene multiples....but then again did the bubble inflate net worths to high....ponderings...what else...
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Babyfrog starts this thread with a comment to the effect what “shocks me are the low values of households' net worth in general.” The challenge he posits is, “So let's figure out a way to turn the country into a nation of Fools!”

My discussion of this very 'now' topic that follows starts with children (topics of education have appeared in this thread), then discussing value programming in generations with the effect of significant emotional events (SEE), reviewing more statistics than you will care to read (actually very interesting), and a final recommendation for children to understand the value of money and enticing them to become Foolish.

Children
'Children learn what they live' is from a poem on family dynamics by Dorothy Law Nolte, a lifelong teacher and lecturer, that presents a simple but powerful guide to parenting the old-fashioned way: instilling values through example.

During developmental periods of childhood, we develop our values in life. Beliefs develop around our values. Beliefs and values have a very powerful affect on your life, because we filter all our information through them to form attitudes. Since a person spends most of the early periods of development with the family, it has the greatest impact. Socialization is nothing more than the educational process by which we learn everything from sources such as nation, region, community, church, family, media, peers and friends.

How strong and lasting are these socialization/educational processes? Pause for a moment and call to mind the madrasahs which have been hothouses for extremism where students are taught the virtues of Jihad and the impact of terrorism on our present global civilizations. (Jihad often translated as "holy war" but perhaps more accurately rendered as "righteous struggle.") The terrorist cells and financial centers are around the globe.

In response to 9/11, an 84 year old survivor of Auschwitz said, “Americans don't understand hatred.” It is horribly difficult and painful for Americans to absorb the fact that they are hated, societies resent the consequence of American power. HATRED IS NOT INBORN, BUT LEARNED. Hate is a learned emotion, the point is that emotions are attached to a value.

It is easy to develop an emotional attachment to what money can buy in tangible ways as evidenced by the amount of personal debt today that a couple of generations ago was not commonplace. Discipline is lacking for pay as you go replaced by debt as you go.

Our socialization comes from all sources. Socialization does not end when a person reaches 18. These sources, our total community as it were, can be seen as the full context, or the system of relation, in which culture is developed, transmitted, and transformed. It is a network of people who share common experiences, and in their interaction with each other, find common ways of articulating the meaning of those experiences.

'What you are - is where you were - when' – Dr. Morris Massey
1. What we are now, directly relates to when, and where, we were value programmed
2. We are programmed with gut values by age ten
3. Values will not change unless a significant emotional event occurs

Dr Massey, a sociologist, a Type A, with a frenetic presentation style (and a natty polyester outfit of the 70's), offered a simple and compelling premise: 1) our behaviors reflect our values; 2) our values are shaped by "significant emotional events" (personal, familial and societal); 3) a good clue to understanding values and behaviors, our own and others', is to discover what was happening in a person's life and surroundings at age 10. Massey gave us the means to understand not just our own generation, but all the generations that make up our workforce (the focus for his presentations). He died very young, in his fifties, of a heart attack.

An anecdote. Dr. Massey taught in college and in the late 70's was very put out with students parking their bicycles in his classroom. He warned them over and over not to bring bikes into the classroom. In order to change behavior, he gave them a significant emotional event (SEE). He took one of the bikes and literally stamped out all the spokes in the wheels. Yes, there was much whining all to no avail.

Dr. Morris Massey believes that we are all programmed with our basic values by around the age of ten years. Everything that is going on during the first ten years of our lives has a very important influence. What we are now is directly related to where, and when, we were value programmed. The only way we change our 'gut level' values, according to Dr. Massey, is if we have a significant emotional event (SEE). Significant emotional events are events so out of the ordinary that they can cause us to change the way we look at things and how we assign value to them.

According to Dr., Massey, values are formed in three distinct phases. These phases include: 1) Imprinting, 2) Intense Modeling, and 3) Socialization. Not all of our values are equally as strong. The stronger our values are, the more reluctant we are to change them; our weaker values are more readily changed based upon newer experiences. These new experiences are often referred to as Significant Emotional Events (SEE). The birth of a child, marriage, divorce, death, or other traumatic events are all examples of SEEs. The bottom line is that our values have varying degrees of strength. Some values we are extremely committed to; others we may be willing to change if shown a different point of view.

The SEE that occurred during the depression was long lasting. Savings were wiped out, and confidence in banks was eroded. It was following the depression that the 'middle class' evolved, there was none prior to that era in the United States. Significant events have shaped the value systems of different generations. Massey profiles two unique generations within our society: "traditionalists" and "rejectionists."

Values were formed during the great depression. WWII with stable neighborhoods, strengthened the value placed on family. Values formed during this period are quite different from those of recent generations, new influences dramatically influenced their values. Technologically we headed toward the moon and launched into the computer age. Hero models shifted to the bad guys. Social change was accelerated by the civil rights legislation. The United States reacted far differently to the war in Viet Nam than to any previous war. Parents, trying to overcome the deprivation they knew from the Depression, were overly indulgent and failed to teach their children responsibility. In school, the 'social pass' further weakened the sense of consequences and responsibility for performance.

Today, the nuclear family has been bombarded and split. Television takes the parenting role from mothers who are no longer content to manage the household, who cannot afford to stay home, or both. ( An aside. A recent research report indicates that ADD is found more often in children who were exposed to one hour of TV up to three years of age.) Music is all-pervasive. To speak to today's youth one must understand their language. The effect of Music, Radio, Video, and Computers cannot be ignored. People relate to the world through filters of media, the media are dominant forces today in determining values of young people today.

Massey suggests that most people are shaped by events that occurred around them as they were children and young adults. Baby Boomers, for example, are "children of the 60s", the Vietnam War, Robert F. Kennedy; and Woodstock which bring forth potent memories. Mr. Massey doesn't suggest, nor do I, that everyone born in 1955 moves in lock-step formation…just that this cohort group witnessed similar events that form their ideas and approach to life.

Radio Babies Born between 1930-1945
Born before TV was a staple in most American homes, this is a generation that experienced some hard times during their youth. Radio Babies were born or were small children during the Great Depression in the early 1930's. During their formative years, the value of money and a secure job were reinforced. Consequently, for many in the workforce from this generation, getting a job – and keeping a job – are extremely important. The concept of changing jobs, much less careers, every two or three years is a strange one to this group.

Baby Boomers Born between 1946-1964
Baby Boomers were born into a time of relative prosperity in the U.S., when their fathers might have been coming home from World War II or The Korean War. Many Boomers' parents taught them to work hard, "pay their dues" and aspire towards a nice home in the suburbs, a high-paying job, and a good education. Boomers rode a wave of success into the mid 1980's, when downsizing and layoffs awaited many who had been loyal, one-company employees. (In the early 1980's when the recession began, many companies began to lay off workers by the thousands and the term 'downsizing' became a common term recognized throughout many corporations and industries.)

Generation X Born between 1965-1976
Gen X'ers watched as their mothers went to work and they became "latchkey children." Gen X'ers watched as their parents or their friends' parents divorced and remarried. Gen X'ers watched as their parents lost their jobs. It's not a surprise, then, that so many of this generation either wants to be entrepreneurs or want to find careers that provide a balance between work and family life.

Generation Y Born between 1977-1985
We have a fourth generation entering the workforce: Generation Y. These are people born between 1977-85, so the first wave is out of college or vocational school and is in the job market.
What should we expect from youngsters who were forming their values during the 70s and 80s? What are the long range effefts of political corruption, terrorism, galloping inflation, recessions, dwindling resources, genetic engineering, and computer technology. What will today's young people try to tell us? Will we understand? This is a technologically talented generation that's ready and eager to make its mark.

Factors
It seems like every day something new hits the fan. Crises, war, recession, buyouts, takeovers, outsourcing, downsizing, terrorists, AIDS, drugs, crime - we've got bogeymen lurking everywhere. Scary? You bet! And not included in this list is the increasing number of immigrants adding to low income numbers, inflation or deflation or stagnation, debt, and the strange accounting and spending system used by the government.

An aside. Please know that terrorism is a tactic, it is not the war. The Cold War had a defined enemy with geography, that is not what we face today. And there you have a real bogeyman lurking, striking in country after country. There will be many SEE's for future generations as was 9/11.

The point here is to pull back and look at what people are, where they were when their values formed and can we understand how people deal with differences in values. It is only then that we can form an acceptable balance of these differing views of the various groups in our society. What they are is where they were when . . . .

Statistics and Inferences
The median income statistic is significantly below the mean figure. This would mean we have a many, many low income people. This is not surprising to me. (Median vs. Mean for 1998, includes detailed information.) http://www.consumerfed.org/evidence.pdf

Unless pensions, annuities, IRAs, 401(k)s and other such things are not counted as part of Net Worth, those numbers are shockingly low.

Household net worth is defined as the value of assets, minus debts. Half of all households had net worth above the median figure and half were below. Included in net worth were interest-earning assets, checking accounts, stocks and mutual fund shares, real estate, motor vehicles, value of business or profession and mortgages held by sellers.

1989 – 1998
Between 1989 and 1995, the net worth of the median household was basically stagnant, rising just 2 percent over the entire period. Between 1995 and 1998, in contrast, it jumped 18 percent. By 1998, the median U.S. household had a net worth of $71,600. All of these figures are drawn from the Federal Reserve's "Survey of Consumer Finances" conducted every three years.

As recently as 1989, fewer than one in three U.S. households had any stock holdings. By 1998, that had grown to almost one in two. The jump between the 1995 and 1998 surveys was particularly striking. In the space of three years, stock ownership increased by 8.4 percentage points, from 40.4 percent of U.S. households to 48.8 percent.

Over the 1989-1998 period, the percentage of household financial assets kept in bank accounts, certificates of deposit, and savings bonds fell, as households put more of their savings in higher-return – but riskier investments. (Ah, just in time for the big plummet.)

Nearly three quarters of U.S. households have debt of some kind. The median amount of debt owed by those households was $33,300 in 1998, up from $23,400 just three years earlier. Even though interest rates on many types of loans fell between 1995 and 1998, debt payments rose as a percentage of household income. The 1998 survey also shows that a significant number of households (particularly at low and middle incomes) are struggling with truly burdensome debt payments. For 12.7 percent of households with debt, loan payments add up to more than 40 percent of income. Not surprisingly, a growing number of households are not keeping up with their payments: the percentage with one or more payments at least 60 days past due reached 8.1 percent in 1998. http://www.uaw.org/publications/jobs_pay/00/0500/jpe04.html

Older Americans - 2000
The net worth (assets minus liabilities) of households increases with age until age 74 and declines somewhat from age 75. The median net worth of the elderly households (with a householder aged 65+) in 2000 was $108,885 as compared to $55,000 for the total population. The largest asset type is home ownership which accounts for $85,516 or 78.5% of this net worth. Over 78% of elderly households own their own home. Other major asset types owned by the elderly include: stock and mutual funds (29%), regular checking accounts (31%), interest-earning accounts at financial institutions (71%), IRA and Keogh accounts (25%), and motor vehicles (78%).

There are major differences in the median net worth of different household types. Elderly married couple households have a median net worth of $173,950 ($57,586 when home equity is excluded). Male households have a median net worth of $84,000 ($15,375) when home equity is excluded). Female households have a median net worth of $76,000 ($10,475 when home equity is excluded).

This household net worth is not found in all segments of the elderly population. 70% of elderly households have a net worth of at least $50,000 and another 8.4 % have a net worth of $25,000
to $49,999. On the other hand, about 21.5% of elderly households have a net worth of less than $25,000 – 6.7% have a zero or negative net worth and another 6.6% have a net worth of $1?4,999. http://www.aoa.gov/prof/Statistics/profile/2003/16.asp

Debt
Personal debt increased right along with increase in wealth. In fact, actual saving out of current income was declining at a precipitous rate. In the latter half of the 1990s, the ratio of net worth to income climbed from about 470 percent to more than 600 percent, while the personal saving rate (income less taxes and consumption) plummeted to zero (Maki and Palumbo, 2001). This pattern reflected what economists have called the "wealth effect", which occurs when people consume more when their paper wealth increases, even though their income may not have increased. When they consume more, without any increase in income, saving necessarily declines. Between 1992 and 2000, aggregate net worth increased from $30 trillion to more than $41 trillion, while the personal saving rate declined by 4.1 percentage points (Maki and Palumbo, 2001; Federal Reserve Board, 2001).

Between 1989 and 1998, median total debt levels (including housing) for the population aged 50 and older with any amount of debt doubled or nearly doubled at every income level. For those in the bottom quarter of the 50-and-older income distribution, median total debt went from nearly $1,600 to more than $3,500 in 1998 dollars between 1989 and 1998 (see Table 1). For those in the middle half, median debt went from $10,500 to $22,000. For those in the top quartile, it increased from $43,000 to $80,000. http://research.aarp.org/econ/dd70_debt.html

Saving
The percentage of people saving for retirement in 2001 decreased to 71%, compared with 75% in 2000, according to the 2001 Retirement Confidence Survey, which gauges workers' attitudes toward retirement planning. It was the first decline in savings rates since 1998.

The change in behavior can be attributed to recent drops in consumer confidence, employment, the economy and the equity markets, according to Washington, D.C.-based Employee Benefit Research Institute, a sponsor of the survey.
http://registeredrep.com/ar/finance_trends_issues_surveyfewer/

2001 Summary
As a whole, people living in the United States in 2001 were richer, earned more money, owned more stock and had debt levels that were less as a percentage of total assets than in 1998. http://www.federalreserve.gov/pubs/bulletin/2003/0103lead.pdf

Children and Forming Early Foolish Values
If we accept the premises that children learn what they live, values are programmed by age 10, increasing debt levels with a decrease in saving for the future, what might an action program look like for parents.

Instill values the old fashioned way, family example. Show your child good money management skills by creating and using a family budget, making regular contributions to savings and retirement accounts, and spending money responsibly. This instills thinking about the future, not just today, with a dose of disciplined planning.

Young people need to be indoctrinated to the financial discipline of savings and accumulation. Let the youngsters learn the consequences associated with their spending decisions. This link is marvelous in listing activities by age group, however I don't think a one day 'banking day' at school will incorporate a value system. Early in age, children must learn the difference between 'needs' and 'wants.' http://www.prweb.com/releases/2004/2/prweb107602.htm

Just as KennyO, I do not ascribe to schools taking on the function of learning finances for the simple reason that the family is the strongest influence of children at early ages. However, the one thing I do see that schools could buckle down and do a better job of teaching is the effects of compounding interest. What the bean counters know is this: If you put your money in an investment with a given return -- and then reinvest those earnings as you receive them -- the snowball effect can be astounding over the long term. This is particularly true in retirement accounts, where your principal is allowed to grow for years tax-deferred or even tax-free. A very time-proven principle is found here; the lesson is this, the longer you leave your money invested and the higher the interest rate, the faster it will grow. (Remembering emiller's purchase of a piece of land as a grand example.)

Disciplined, responsible spending and saving is a start. For those who have experienced the loss of jobs, saving becomes increasingly difficult.

Beyond Children
I've got major net worth rebuilding to do after a near-death experience with consumer debt. Just talking about it seems to be a great way to help other people see the sense in it.

Thank you for your input to this thread. When passing through a socialization process for American culture, we become alike in many ways, yet we all remain unique in other ways. And therein lies the difficulty in changing the behavior of today's big spender into debt with the attitude of don't worry about tomorrow. TamarionG has one way of approaching this problem on a personal one to one basis. I applaud her action.

When the value system processing responds to the forces of media, music, prejudices, textbooks, schools, family, friends, church/religion, what SEE will change an overall attitude towards money as the government cranks up the printing presses with out of control spending? Pork barreling is at a supreme level in these very difficult times, no curbs applied. Constituents do not take their legislators to task on this issue. Enough political commentary here. http://www.thehill.com/news/040704/pigbook.aspx

Ro

Selected references:
Children Learn What They Live http://www.epab.co.uk/children_live.htm
Building a Bridge Across Generations
http://www.e-hresources.com/Articles/Sept1.htm
Morris Massey http://www.enterprisemedia.com/massey.html
Through the Ages. Some interesting stats, average ages of Cadillac, Lincoln, Lexus, Infiniti, BMW buyers, average age timesharer's buyers, numbers of Peace corp volunteers by age, etc. http://www.signonsandiego.com/news/features/retirement/agetimeline.html.

Savings, banks, and children
Financial education, focus children http://www.financial-education-icfe.org/default.asp
Want to teach children saving? Open a bank account – Research financial institutions http://www.rgj.com/news/stories/html/2004/01/31/62960.php
One bank program http://www.astoriafederal.com/html/everyday_banking/savings/kids_bank.html
Regular allowance vs. “dole” system
http://www.indystar.com/custompubs/moneycenter/articles/section_budgeting_2.html
One bank program http://www.astoriafederal.com/html/everyday_banking/savings/kids_bank.html








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Wow, what a post, you said you'd be back with more, and you weren't kidding....

One thing I have a little question about:

If we accept the premises that children learn what they live, values are programmed by age 10

How is it that siblings can have such different views on the subject of money. Why is it some can "get it" and others "don't" when it comes to credit card debt and savings? Is it just that they had different significant emotional events at different times that they interpreted differently?

Cameron
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Ro,

Interesting analysis, if somewhat more pessimistic than my view of humanity. I am more a student of Viktor Frankl, holocaust survivor, author, and noted psychiatrist.

http://www.geocities.com/~webwinds/frankl/quotes.htm has some excellent gems. Chief among them:

"Everything can be taken from a man but ...the last of the human freedoms - to choose one's attitude in any given set of circumstances, to choose one's own way."

One thing that sets human beings apart from the animals is our ability to break free from programming, break free from simple pattern matching and repetition, and break free from mere condition/response behaviors.

We may learn from our parents, our families, our friends, and our educators. We may be socialized, conditioned, and trained. But we are not merely programmed automatons. We are human beings with free will and self-determination. We can break free. We can break through. We can improve our lot in life.

And most importantly of all, tomorrow is not foreordained. And alone among the inhabitants of the Earth, as human beings, we have the power to shape our own destiny, to change our own futures, and to plan our own fates.

While I understand that many people choose to live only within the guidelines of their programming, choose to not attempt to better themselves and their life, it is still their choice. Blaming the way a person was brought up, blaming the school system, blaming other people, and other externalization rationalization does nothing constructive. All it accomplishes is a further deepening of the patterns and programming and other 'comfort activities' that keep people from taking the simple steps necessary to improve their lives.

-Chuck
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Congrats on 30k Chuck!
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Chuck!!

You stole the 30,000th post. I'm pretty sure the bookmakers over at the Twisted board didn't make odds on that.

Buffy (who didn't take the bet anyway...)
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Oops. Didn't realize it. I'm SO sorry!!!!

-Chuck
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How is it that siblings can have such different views on the subject of money. Why is it some can "get it" and others "don't" when it comes to credit card debt and savings? Is it just that they had different significant emotional events at different times that they interpreted differently?

Thank you for the question. I am not sure what ages you are speaking of in your query so what I have to offer is more in generalities and falls within my worldview.

You have asked a question that perplexes many - about kids 'getting it'. With children, different ages and stages of development, have a great deal to do with behavior. And enter now, in trying to come to some sort of explaination, is 'attitude'. You know the saying, 'he/she has an attitude'? I am not a child psychologist, but I will try to shed some light here in terms of having spent many hours in classrooms and clinical practice.

Beliefs and values have a very powerful effect on life, because we filter all our information through them to form attitudes. Attitudes comprise values (what's important to the person), beliefs (knowledge the person has some emotional attachment to and holds as true or false) and behaviour (what the person chooses to do having evaluated - unconsciously - knowledge, beliefs and feelings).

Values
Values are about how we have learned to think things ought to be or people ought to behave, especially in terms of qualities such as honesty, integrity and openness.

Values are organised in hierarchies, with the most abstract ones having the greatest influence. For example spirituality is more abstract than family, which in turn is more abstract than money.

In past generations, teaching values and virtues to children only required parents to set a good example. This is not the case today. With the strong influences of the popular culture luring children away, it takes more work from parents to instill the values they hold dear and the virtues they admire. Whatever values you wish to instill in your children, it's essential to model the values you cherish. When instilling a value, be sure to surround your children with love and nurturing. Don't be harsh, demanding or forceful. Criticism often turns children away from an activity. They get the message that they're incapable of completing the task competently.

Values exert a powerful effect upon your life. They determine how you relate to your family and your partner, what products you buy, how you perform your job and who you vote for. Values dictate your leisure time activities, your interests, what you learn, your religious convictions and so on. The 'generation gap' is a statement about values.

Louis Rath's Values Clarification Exercise
(1) Choosing freely
(2) Choosing from alternatives
(3) Choosing after thoughtful consideration of the consequences of each alternative
(4) Prizing, cherishing, being happy with the choice
(5) Prizing enough to be willing to affirm the choice to others
(6) Acting or doing something with the choice
(7) Acting repeatedly, in some pattern of life
If a value meets all areas, it's considered a full value. If not, then it's perhaps a partial value. Some values are more important or can change with circumstances, such as, winning the lottery, accident, hurricane, or a significant emotional event. A value does not have to meet all criteria to be important or meaningful in our lives Rath would say that you must meet all seven in order to call it a value.

How do you arrive at values?
30%--family background
30%--life experiences
25%--society/environment

As teens mature and take responsibility, they can discuss their current attitudes and look back at values and social skills they learned from their parents and those they developed on their own.

You have to occasionally reassess your values (the values clarification exercise) to see if those rules of old still fit your current life and direction. These old values were put in place to keep us safe and get us started on the next leg of our journey. They allow us to process information such that we can categorize and file new information in a logical and orderly fashion. Such values keep us from doing things that, at that time, are dangerous to us emotionally, mentally, or physically. But, as we grow, mature, and learn, we are able to gradually handle more of what life hands to us. It is then that we must be able to reassess our values to get rid of old, unnecessary rules and put in place new ones that can allow us to move forward in life.


Beliefs
Beliefs are the assumptions we make about ourselves, about others in the world and about how we expect things to be. Beliefs are about how we think things really are, what we think is really true and what therefore expect as likely consequences that will follow from our behavior. a child may be brought up in one church and in adulthood join a different church or become agnostic or atheist. There is a change in what one believes to be true.
From the perspective that all Reality is the product of consciousness, it should be clear that a person's beliefs are very important because those beliefs define the limits of their experience in this realm. Santa Claus and the Tooth Fairy come to mind at an early age.

Most humans currently live their lives in this realm around the belief systems of others, be that of their parents', peers', mentors' or society's and because of this they inadvertently give up their ability and responsiblity to define their reality and have control over their lives.

With this in mind, it is very important that each individual comes to his/her own conclusions about all matters in general and spirituality in particular, rather than blindly embracing the views of others. What all this means is that a person should embrace ideas and beliefs that sit well with him or her at the present time, while keeping in mind that as awareness about reality expands with the advent of new experiences, so must one's concept of reality change accordingly.

A belief system provides a core set of values on which we base everything we do, say, or believe. We can classify our values as a 'set of rules' that define how we process and store information as it comes in through our conscious mind. Our conscious mind takes these rules and shaves off the sides, planes the ends, and polishes the exterior to make it easier to process and store in our subconscious. The subconscious then takes this processed piece of information and, according to our rules, associates it with other information that we classify as 'solid' and 'accurate.' During this association, we begin to understand the new information and are better able to assimilate it for future reference.
Attitude - "Attitude is everything."
An attitude is simply a predisposition to approach or avoid an idea, event, person or object. In other words, it is a tendency to act in one way or another toward an "attitude object." Social psychologists commonly differentiate between affective, cognitive and behavioral responses. Schools reward positive attitudes, punish negative ones, and, in general, believe that everything in the school would be better if everyone had a better attitude.

Attitudes are learned. This learning usually occurs gradually through many different kinds of experience or as the result of a particularly powerful emotional experience Most attitudes are learned from those experiences can be favorable or unfavorable, pleasant or unpleasant, and the resulting attitude ends up as either negative or positive. Social environment plays an important part in shaping attitudes. We may reflect attitudes from others, such as parents, friends, leaders, or persons of prestige. We may acquire them from the cultural influence of a certain geographical area such as a farm, small town, or slum. Also, attitudes may be affected by age, position, and education.

Some attitudes we were just talked into forming, perhaps by a particularly persuasive friend or some especially dramatic demonstration or event. Often our attitudes about the environment or politics come from information and persuasive communications and that includes media. Persuasive ads to buy now and pay later abound.

Tom Blandi: Attitude Quotation
Our attitudes control our lives. Attitudes are a secret power working twenty-four hours a day, for good or bad. It is of paramount importance that we know how to harness and control this great force.

Attitudes are at a higher logical level than values and are comprised of clusters of belief systems. Psychologists have identified three major approaches to attitude change: cognitive, social and behavioral. Attitudes are the established ways of responding to people and situations that we have learned, based on the beliefs, values and assumptions we hold. Attitude become manifest through our behavior.

Here is a diagram of the components of attitude. http://www.cultsock.ndirect.co.uk/MUHome/cshtml/index.html

Behavior Behavior is the manner of conducting oneself, the response of an individual or group to its' environment. Values, beliefs, attitudes, and behavior, are cornerstones of who we are and how we do things. Behavior is the result of a person's reaction to a situation, group, or person. That reaction depends on what the situation is, and how that person interprets the situation. If several persons were placed in the same situation, there probably would be varying reactions to the situation. This would occur because each person may see that situation differently. Such differences are expressed in attitudes.

Behaviors can be changed, but attitudes may not. For example in the military, I may not like to do physical training (PT) and have a negative attitude towards PT; however, to set an example (as well as avoid punishment) I go to formations and do PT.

Behaviors in regard to money can reflect attitudes which can be different for different individuals that evolves into different choices. Behavior may be situational and how the situation is interpreted, spending in this case. So in your original statement, you had it right, life's individual experiences can be interpreted differently.

A possible process:
Value - Money is good and a necessity of life.
Belief - Money buys things, necessities and 'toys'.
Attitude - Delayed gratification is stupid.
Behavior - Spending is better than saving.

In the values clarification exercise, attitude enters points 2, 3, and 4.

I hope this had not muddied your waters.

Ro



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Interesting analysis, if somewhat more pessimistic than my view of humanity. I am more a student of Viktor Frankl, holocaust survivor, author, and noted psychiatrist. . . .But we are not merely programmed automatons. We are human beings with free will and self-determination. We can break free. We can break through. We can improve our lot in life. . . .Blaming the way . . . .

Hi Chuck,
Thank you for your comments, it gives me an opportunity to explore more in depth these very interesting subjects, the matter of reality, man as a social being, and choice, e.g., human behavior and a social environment. Today we have a more rapid evolving domestic and global social environment. In reality, the troubles of the world will not disappear, man, not God, will see to that. My struggle with humanity and what it means is in another post. I have great hope for the future that man can reconcile compassion with experience for a better world. We are part of all we have met, we shape our buildings, thereafter they shape us. To choose one's attitude is to choose one's own way in life.

I can understand your view of Massey's word 'programming' as inflammatory. The language of sociologists might be a bit different from psychologists. I can certainly see that this brings up S-R thinking in psychology of learning or that of computer programming. Not quite that way for sociologists.

Sociology and Learning Theory
Micro-sociology - A human being is capable of conscious thought and self-awareness. Human action is not simply a reaction to external stimuli, but the result of the meanings, theories, motives and interpretations brought into a social situation by the individual. Social reality is a "constantly emergent" property, not something fixed and inevitable. This is a voluntary approach stressing the individuals voluntary actions. For example 'freewill' is stressed.

The learning language of Sociologists. We learn most from people with whom we identify. When younger this is parents. Later it is peers. Attractive and famous people also are effective, as is those in authority.

Groups have norms that must be followed. We thus learn to conform to rules of other people. Values are also often a significant element of culture, where they form a part of the shared ruleset of a group.

In social environments from families to companies, values, or norms, provide the unwritten rules which allow us to trust one another and work together. If we share values then we can predict one another's behaviors and thus feel safe and know what to do.

Socialization simply means the various ways we learn how to be a human being and are taught the basic rules of the society in which we live. I know you know this and I mean not to offend you. One of the central ideas of Sociology is that people are not born knowing how to behave. If this claim is valid, it means people must, in effect, learn how to "be human" (in the most general sense of the phrase).

This teaching and learning process, sociologists argue, is related to human development and need (both physical and cultural) or, to put it another way, to the concepts of physical development and psychological development. Another idea that leads us to favor a cultural approach to understanding patterns of human behaviour is that people choose to do things in a wide variety of different ways. Programming in the framework of Massey is grounded in sociological teaching and learning process with socialization interactions.

I did not take what Massey said or child developmental expert Dr. Harris (Nolte's associate) views on psychosocial development as evolving into a pessimistic view of humanity or espousing the loss of human volition. A theory is just that, a model to build from. Nor do I find evidence of the blame game. Perhaps my interjection of some of the tribulations of the world left that impression. From Desiderata by Max Ehrlmann, a great inspiration for me, “And whatever your labors and aspirations in the noisy confusion of life, keep peace in your soul. With all its sham, drudgery and broken dreams; it is still a beautiful world. Be cheerful.” http://www.sfheart.com/desiderata.html

I know Dr. Victor Frankel well, he developed "Logotherapy". Logotherapy helps an individual detect his unique meaning or mission in life by reexamining his personal vision and values to assure they are based on principles and reality. He suggested in the seventies that America should erect on it's West Coast a "Statue of Responsibility." An interesting observation from him. I value his contributions along with many others, Harry Stack Sullivan, Carl Jung, Erik Erickson, Virginia Satir, Nathanial Branden, and G. Bateson, to name a few. They all espoused 'peoplemaking.'(I find Frued intolerable with his attitude towards women,leaving his growth and development analysis to younger childhood, and his cocaine habituation: in later years he had no nose.)

What I find is a consistent theme in the psychological/sociological thinking of Frankel, Massey, Brandon, Erickson are the concepts of 'choice' and 'responsibility.' Responsibility implies choices. Socialization is the process by which children and others adopt the behavior patterns of the culture that surrounds them.

Dr. Massey's Reality
I like the view of Morris Massey whose seminal work is “Who You Are is Where You Were When.” Here he argues that short of a Significant Emotional Event, a S-E-E if you will, we are not likely to experience a major shift in attitudes/values. The social learning theory (concentrates on the power of example) perspective derived from traditional learning theory and has a premise that human behaviour is a function of both the person and the situation.

From the field of sociology, he consulted with businesses. "You can't DO quality 'til you BE quality" implying a manager must understand him or herself and know how to lead and influence people before moving into anything related to quality. To understand the differences of dynamics of leadership vs. the dynamics of management, he used 'what you are is where you were when' as a teaching tool, that management is responsible for the work environmnet.

His teachings assisted in developing a workplace to not be invaded by Beavis and Butt-head though it may be a matter more of perception than of reality. To be sure, the next generation has characteristics that seem strange and illogical to us, but weren't we the same to our supervisors way back when managing a workforce? He points out interesting differences in the 'generations' views of the world. These views were shaped by not only family and culture, but by what was happening in the world while each generation was growing up.

“The Young and the Restless” by a Firechief
For example, Supervising and managing Gen X . The Generation Xers, then, have brought their view of the world and their values to the workplace, but many of these values are the products of the world in which they were raised.

Xers tend to be less loyal; they keep employment options open. The Xers are independent. This generation spent a lot of time in day-care and as "latchkey kids," which gave them independence at a younger age, but could lead to self-absorption bordering on selfishness. They work well alone, and enjoy challenges, but may not be adept at teamwork early on.

This group prefers a somewhat contradictory supervision style: Be hands off, but be there. In other words, provide assignments, stand back a ways and be ready to answer questions, but try not to hover or micromanage. Be ready to talk, talk, talk. Tell them what you're going to tell them. Tell them. Tell them what you told them.

Learn to move faster in making change. Consider the speed of the world in which this generation was raised. The bureaucratic model is slow enough relative to the private sector, but changes within your discretion can be sped up if worthwhile.

The Generation Xers, then, have brought their view of the world and their values to the workplace, but many of these values are the products of the world in which they were raised.
http://firechief.com/ar/firefighting_young_restless/

Dr. Massey was an expert on conflict resolution, human behavior and diversity issues, and known for his program, “Flashpoint: When Values Collide.” Massey promises the audience that life will be more enjoyable if they're awake and take personal responsibility to manage their values to best suit their lives.

Dr. Frankel's Realilty
From Frankel's Man's Searching for Meaning,
On Choosing One's Attitude
"Everything can be taken from a man but ...the last of the human freedoms - to choose one's attitude in any given set of circumstances, to choose one's own way." p.104

"We who lived in the concentration camps can remember the men who walked through the huts comforting others, giving away their last piece of bread. They may have been few in number, but they offer sufficient proof that everything can be taken from a man but one thing: The last of his freedoms - to choose one's attitude in any given set of circumstances, to choose one's own way."

On Committing to Values and Goals
"Logotherapy...considers man as a being whose main concern consists in fulfilling a meaning and in actualizing values, rather than in the mere gratification and satisfaction of drives and instincts." p.164

. . . . ."We can discover this meaning in life in three different ways: (1) by doing a deed; (2) by experiencing a value; and (3) by suffering." p.176

. . . . ."life ultimately means taking responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual p. 122. This concept is what he called will-to-meaning. Some forms of will-to-meaning are hunger, humiliation, fear, and deep anger at injustice. Some importance of will-to-meaning is that he had to find a sense of responsibility in his existence. One of the characteristics from will-to-meaning was finding responsibility.


Brandon's Reality
Do I believe man to be volitional? Yes. From Nathanial Branden, a psychotherapist, "The root of the need to learn trust is the fact that consciousness is volitional: we have the choice to think or not to think. We control the switch that turns consciousness brighter or dimmer. We are not rational — that is, reality-focused — automatically. This means that whether we learn to operate our mind in such a way as to make ourselves appropriate to life is ultimately a function of our choices. Do we strive for consciousness or for its opposite? For rationality or its opposite? For coherence and clarity or their opposite? For truth or its opposite?

The practice of living consciously: respect for facts; being present to what we are doing while are doing it; seeking and being eagerly open to any information, knowledge, or feedback that bears on our interests, values, goals, and projects; seeking to understand not only the world external to self but also our inner world, so that we do not out of self-blindness.

The practice of self-acceptance; the willingness to own, experience, and take responsibility for our thoughts, feelings, and actions, without evasion, denial, or disowning — and also without self-repudiation; giving oneself permission to think one's thoughts, experience one's emotions, and look at one's actions without necessarily liking, endorsing, or condoning them; the virtue of realism applied to the self.

The practice of self-responsibility: realizing that we are the author of our choices and actions; that each one us is responsible for life and well-being and for the attainment of our goals; that if we need the cooperation of other people to achieve our goals, we must offer values in exchange; and that question is not "Who's to blame?" but always "What needs to be done?" What do I need to do?"

The practice of self-assertiveness: being authentic in our dealings with others; treating our values and persons with decent respect in social contexts; refusing to fake the reality of who we are or what we esteem in order to avoid disapproval; the willingness to stand up for ourselves and our ideas in appropriate ways in appropriate contexts.

The practice of living purposefully: identifying our short-term and long-term goals or purposes and the actions needed to attain them (formulating an action-plan); organizing behavior in the service of those goals; monitoring action to be sure we stay on track; and paying attention to outcome so as to recognize if and when we need to go back to the drawing-board.

The practice of personal integrity: living with congruence between what we know, what we profess, and what we do; telling the truth, honoring our commitments, exemplifying in action the values we profess to admire."

My Thoughts
I find nothing incongruent in what Massey said with what Frankel said or with what Brandon said. Massey spoke to the formative years as Erik Ericson does. Frankel and Brandon speak to adult years. A common theme found in all their 'reality' is choice and responsibility. Blame does not enter the equation at any point, that comes from attitude.

There's an interesting phenomenon among human beings. It goes something like this. If you cut me off in traffic, I am likely to think of you as stupid, careless, reckless, or any of a number of other negative traits that I ascribe to your personality, that I thoughtlessly say about you-as-a-human-being. On the other hand, if I cut you off in traffic, it's because I am in a hurry, was momentarily distracted, was in a bad mood –something temporary and passing, not because I am a bad, stupid, careless person. Ah, now. This is called the fundamental attribution error, and it's always at work in our lives. When you do something I perceive as thoughtless or unkind, I may fall into the trap of believing its because you are a thoughtless or unkind person by nature. If I do something unkind, I have a very good reason for it and it doesn't define who I am! An example of free choice of an attitude.

The Foolish Collective
The thrust of this board is reflected in the title “collective” and the fact that we are a subset investing community in the larger community of the Motley Fool. As an ongoing endeavor through posting, we are constructing our reality of the investing world through sharing knowledge in a learning experience context. Our view of reality of investing may be transformed through interaction here at the Collective into a new consensus reality. A major tenet is that we as individuals are able to make responsible choices for the use of our money.

Our investing behavior (action from values, beliefs, attitudes and premises) is in the context of the knowledge available to us, from our thinking or non-thinking. Our investment actions are free in that they are under the control of a faculty that is free. That is why we are responsible for our investment choices. It is our attitudes that influence our choices, from Frankel, . . "to choose one's attitude in any given set of circumstances, to choose one's own way."

Ro (who learned rambling from Chin)

Some reading:
Zen Budhism is probably the only discipline which tries to arrive at some sort of understanding of the universe through non-verbal introspective means. The problem with non-verbal constructs is that you can't explain them to anyone else.
This is a great book. Contrary to the name, the book is not on Zen Buddhism or as a matter of fact, on motorcycles. Its more of a metaphysical take on the philosophy and technology in our society.
Zen and the Art of Motorcycle Maintenance AN INQUIRY INTO VALUES by Robert M. Pirsig
http://www.amazon.com/exec/obidos/tg/detail/-/0688171664/103-4250609-8175856?v=glance
Online reading of book http://bonigv.tripod.com/toc.htm
Ericson's Stages http://www.geocities.com/MyPaganHEN/p_eric.htm
Brandon's What Is and Is Not http://nathanielbranden.net/ess/exc04.html



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Rozanovitch added to your Favorite Fools list.

Ro,

You rock...

-Chuck
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Chuck,
You are always delightful, but you just blew me away with "You rock..."
What a nice thing to say! But what really got me was being added to your Favorites as a simple act of valuing at TMF, that meant a lot to me.

I got to update my list and thanks for the reminder.

Ro
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What a great thread - it really made me think about how we're raising our son.

"How is it that siblings can have such different views on the subject of money. Why is it some can "get it" and others "don't" when it comes to credit card debt and savings? Is it just that they had different significant emotional events at different times that they interpreted differently?"

I don't have any research to back this up, just personal experience...

My younger sister can't make ends meet, can't handle a dollar, hasn't saved for retirement. However, she's not stupid - she's a graduate of the Wharton School of Business.

My wife and I on the other hand, save every dollar we can, and have a nice nest egg building.

What's the difference?

Only a guess, but when I was growing up, my Dad started his own business, and money was tight. Every dollar counted, and although we didn't feel it, we lived frugally. My wife and I paid for our own college educations.

By the time my sister went to college, things were much better, and they paid for her education, at more than 4X my cost.

Anecdotal, true, but my feeling is when you don't learn the cost of something, you don't value it. I know how tight money can get, and am very careful with it. She doesn't, and lives paycheck to paycheck.

Just my $0.02.

Chris
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"The money comes too easy, and people don't think of the consequences!"

Our home has doubled in value since I purchased it in 1996. Many peers have wondered why we aren't trading up or adding a huge addition on the house (it is a modest 3br/1 and half bath ranch.) Our view is that we want less debt, not more. We're pretty close to paying it off, and barring a job transfer (which is not imminent) we aren't going anywhere. I get alot of blank stares when I say that. Our son is 3 years old; we should have the mortgage paid (God willing) by the time he is 5, giving us 10+ years to save for his college. Once again, we want less debt, not more. I don't really understand this big push toward acquiring more "stuff" at the expense of saving.
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This is one on a short list of the best threads I've enjoyed in my six years with TMF. Chuck, look at what you started!

Ro, you've got a perspective that's often lacking in discussions about our financial lives. Thanks. I'm an engineer and I tend to avoid (what I see as) the stickiness of sociology. Just the same, it's fascinating when these discussions result in the intersection of objective and subjective, of cold facts and warm bodies.

I have one brother. We couldn't be more different. He followed our father into the carpenters union and relies completely on that union pension fund for his retirement. Dad saved less than he should have but squandered nothing and lived frugally so he had a reasonable financial safety net. Little bro, on the other hand, is secretive about finances. (Any guesses why?) From conversations with my sister-in-law it's clear that they've saved practically nothing (I'll allow that it's really hard to do with four kids and one breadwinner but it's not impossible) and that they don't see it as a problem. She's absolutely right ... so far. If all of us (Dad, bro and me) had lost our incomes on the same day I'd be hurting in a few years, Dad would be hurting in a year or two and bro's family would be hurting by the end of next month.

Lack of foresight and lack of planning are the common threads among non-savers. They view Chuck's dollar-a-day example as too little to bother with. They opine that they'll never get anywhere saving that little so they save nothing at all. Even $3-a-day nets only a little over $1000 per year. That means you work a year to save enough to live on for two or three weeks.

I don't think it at all odd that we brothers are so financially different. Dad was frugal and saved a bit while Mom viewed money in a savings account as a waste when it could buy such nice things for the house at Marshall Field's. And their house was full of really nice things from Marshall Field's which they really enjoyed. It's clear to me why we differ.

I've used two tricks to build savings while enjoying life: One, anytime I've gotten a raise I've waited for the first paycheck that included the raise and immediately began putting half the net increase into savings. The savings grew and I had a little more in my pocket. Two, when I've had a "need" for a toy I've not denied myself but whatever I spent on the toy I also added to savings. To buy a $1200 guitar I saved $2400, bought the guitar for $1200 and popped $1200 into savings. Occasionally the delay in accumulating the necessary amount serves as a cooling off period and I skip buying the toy. Some LBYM'ers might look askance at me but I'm saving and living well and not in debt for my toys. LBYM does not equal Calvinism.

To those of you who want personal finance courses in schools, those courses will teach the mechanics of savings and investment (look in your math textbooks for the same equations). They will not and cannot teach students to care. You've all taken math, science, English and gym classes; how many of you gained a passion for math, science, English and gym from those classes that wasn't already there? Do you really believe personal finance differs?

KennyO
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Hi Kenny0 !

I basically agree with your post. However, I'll add this:

...how many of you gained a passion for math, science, English and gym from those classes that wasn't already there? Do you really believe personal finance differs?

The difference is - they need to be taught what the result of the saving and compounding can be.

Rich
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The difference is - they need to be taught what the result of the saving and compounding can be.

Sadly, that's no distinction, Rich, because the same can be said of any academic subject. Too many people traverse the school systems without appreciating the value of studying each of the subjects in a normal curriculum. You can show them the numbers but they're still just numbers; assign On Civil Disobedience but the structure and elegance of Thoreau's arguments is as abstract as the aforementioned numbers. Immediacy is missing so no value is perceived. The enigma: how can we make more of them care?

KennyO
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WOW!!!

Came via Hidden Gems - where I started noticing, appreciating and respecting some of the names (AdmiralTroll, 1000, etc.) - and ended up in the Foolish Collective. Started reading in reverse chrono order and enjoyed almost every one of the posts until the one by emiller on his purchase of "the farm" and this here thread.

WOW!!!

I didn't know there was so much here, but now I know where to come for not only investing discussions but also for other, more precious and thought-provoking intercourse. I just hope I can find the time to learn and enjoy from all of you.

I made this kinda too gushy...but it reflects my true feelings as I read every single one of the posts on this thread... a great job, Chuck.

WON
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WELCOME to the Collective, WON !

Hope you enjoy your stay here and please do contribute whenever you see fit.

Rich
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To all of you who are frustrated by the fact that most people don't "get it", let me offer this - be glad you don't do what I do. I'm a partner in an accounting firm, and on this last day of "tax season", I can only tell you how frustrating it is to see client after client in every age bracket who just have basically nothing saved. One client - a business owner, 60 years old - said it doesn't bother him that he has no savings because he has a house worth $300,000 that he owns free and clear. I asked him if he planned on selling it and moving into a tent when he quit working. No, he'll just sell the business to his kids and charge them whatever he needs. That's great, pass the problem to the kids. Or the 70 year old guy who got put out of business by Wal-Mart years ago (now his wife works for them) - felt bad until I did his return for a few years and found out they spend $500 - $1,000 per month (yes, per month) to support 10-15 cats and dogs, most of whom need drugs to keep them alive. Or the early 30 year old couple who make $100,000 between the two of them and had to buy a $300,000 house w/ a $270,000 debt, don't have a dime to their name, and when told they had $4,000 refund, he started talking about wanting a projector for the home theater in the basement.

I'm just convinced that most people just cannot look past today. They just can't believe that there's a reason to give up what they want today for some far-off goal. Or, they need every dime they make in order to have what they see their peers have, and they just are not willing to live on 80% of their net income in order to save for the future. It's not that they think social security will take care of them - many clients who talk about it don't believe it will - yet they just can't force themselves to live under their current means. Maybe it's that in the times we live in it's so hard not to see all the "stuff" that could be yours, credit/debt is pretty easy to get, and most people just live for the day to whatever extent their income allows, and if I were to suggest that they automatically save (via payroll deductions)even 10% of their income, whatever it is, they would just shrug and say they "can't" do it. I often find myself wondering what it will be like in 20-30 years when these clients retire with pretty much nothing and the ratio of retirees to workers is far higher than it is now and social security benefits have been cut. Time, which for a lot my clients extends out no more a year, will tell I guess.
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KennyO said:
Sadly, that's no distinction, Rich, because the same can be said of any academic subject. Too many people traverse the school systems without appreciating the value of studying each of the subjects in a normal curriculum. You can show them the numbers but they're still just numbers; assign On Civil Disobedience but the structure and elegance of Thoreau's arguments is as abstract as the aforementioned numbers. Immediacy is missing so no value is perceived. The enigma: how can we make more of them care?


IMHO, the way is to provide passionate teachers. Think back to what subjects you DID pay attention to in school, I'll warrant that they were taught by adults who were "into" what they were teaching. Where can we find passionate teachers? Well, that could be us...

=) Jen

PS First post here, excellent thread!
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I have a thought as to why the 34 and under group scores so low- most of us graduate with several thousands of dollars of college student loan debt. The cost of a college education has skyrocketed in the last several decades. Anyone getting advanced degrees is lucky to get out with less than $50K owed.
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Hi Jen,

IMHO, the way is to provide passionate teachers

I teach for a living and I can tell you from my experience that teachers are little different from the rest of the population - about 10 percent have both the passion and the flat out communication skills to make a dry subject really interesting to students who do not see the relevance in the subject.

These same skills are highly prized in other careers so we don't get them all in in the teaching profession. And the teaching profession will pay about 50% of the salary that can be obtained in industry

At least that's my experience

Regards
Philip

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I would like to go farther and eliminate everything *except* the income tax. I have no idea how much I pay in total taxes for a new TV or a pound of chicken, and I'll bet you don't either. If it *all* came out of my paycheck, especially with your suggestion of a January 31 bill, it would be crystal clear how much we are paying for government. I'll also bet few of us would be pleased by the number.

Mark
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Loreli7777,

I'm afraid I have a different perspective than you do on paying for college. Taking out loans is NOT the only way, nor is having mom and dad pay for it the only alternative.

most of us graduate with several thousands of dollars of college student loan debt. The cost of a college education has skyrocketed in the last several decades.
Some of us worked on and/or off campus jobs during the school year, worked over the summers, and otherwise worked to reduce the cost burden of a college education. Others of us took jobs that had tuition reimbursement benefits and allowed us a flexible enough schedule to attend evening classes. And others joined the armed forces to get college paid for via the GI bill and/or ROTC. And of course, there are scholarships, grants, and other forms of money that do not need to be paid back. Some of us went to in-state public universities with significantly lower costs to receive still decent educations. And, yes, others willingly took on college loans as an investment, believeing that the payback in their chosen field would be greater than the cost of the education.

Take a look at this article from the Fool of other creative ways to get a college education without paying the full price: http://www.fool.com/News/mft/2004/mft04041417.htm

Anyone getting advanced degrees is lucky to get out with less than $50K owed.
Of all the graduate students I knew as an undergrad and as a grad student, very few were taking on loans. Many were taking on research assistanceship or teaching assistanceship jobs to cover the costs of the education, others had tuition reimbursement through their employers, and still others were on full grants. When I was an RA in my junior and senior year in undergrad, the head RA was a PhD candidate in music, who paid her way through working, performing, and teaching. Those that were loading up on debt were typically law and medical students, who expected to see a great return on their investments through high-paying jobs shortly after graduation.

---

Even for those of limited means, there are ways to get through college and graduate school without taking on loans for the full price of the education. It requires work and sacrifice, but it can be done.

-Chuck
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Hi Philip

I was thinking mainly about my plans when I suggested passionate Fools teach the kids about finances <grin>. We are very fortunate and on track to retire early, and I hope that whichever low-cost-of-living community we pick to live in would take advantage of a someone volunteering to teach a "how I did it, you can too" financial class.

You're probably right about the percentages of passionate teachers, I can think of 4 teachers whose passion got me fascinated by something outside my normal interests.

=) Jen
(artist)

PS Thank you Mrs Jones (humanities), Mr Bounds (english language), Mrs Nyman (world history) and Mr Butler (physics and astronomy).
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By the way, Loreli7777,

Hello, and welcome to the Foolish Collective! We are very glad you're here. This is my favorite board here on the Fool, and I hope it can become one of yours, as well.

You will find that while we don't always agree with each other here, we do have a long tradition of disagreeing and debating civily.

I must apologize! Had I realized that you were a first-time poster here with your last post, I would have first welcomed you here before responding with my difference of opinion. That's what I get for following the "Replies to your posts" link, rather than the threaded discussion boards links. My apologies.

Again, welcome to the Foolish Collective.

-Chuck
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Hi Mulderjl,

Excellent post and insight on how people of all ages/income levels have failed to save. Learning not to save starts real early! Witness the following.

Was standing in line at Subway today where Citibank was handing out credit card applications to the local college students coming into the store to eat lunch. The kids thought nothing of filling out the application in return for a coupon for a free (to them) sandwich and a t-shirt or watch. I watched somewhat bemusedly as five kids in line with me filled out the application. All they had to provide was name, SSN, name of someone not living with them, proof of student status (I think the guy was taking pictures of that with the app), and possibly (didn't look closely) an indication of income.

Now they'll get a credit card with a 6-month 0% rate, which changes to either a 12.99% or 13.99% floating rate (prime + 9.99). And all it cost Citibank was, at most, $5.00 ($3 for the sandwich and $1 or $2 for the t-shirt or watch).

Not a single student asked what the rate was or if it changed. None asked about the annual fee (I was told zero). I don't think any of them even so-much as glanced at the terms on the back. Just "give me my money".

Feh!

gebin
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I would like to go farther and eliminate everything *except* the income tax.

...or one step further. Eliminate everything except the sales (or value-added) tax. Make necessities exempt so as not to adversely affect lower income brackets. I worked for many years among the street corner drug supermarkets. It was a rare dealer who did not have his "Benz" or Lexus. I wonder how much "income" tax he paid on the funds used to purchase it.
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From my understanding of a value-added tax (VAT) and how it works in Britain and Europe is that it gets quite expensive and complicated in determining where the "value" is added along the way.

The bolt manufacturer pays a VAT as does the plate manufacturer to which the bolt is fastened as does the car manufacturer to which it's all fastened, etc. A Starbucks may have a smaller VAT because it's only paying once (we'll discount the cups and coffee beans and the grinders, etc. to make the coffee), but other more complicated arrangements are imposed upon far more heavily.

Equally unworkable and fanciful, but still my favorite, is a real flat tax. If I gotta pay taxes (hey! someone's gotta pay my salary although I'm reminded almost daily when I make a motor vehicle stop--"Hey buddy! Don't you know I pay your salary?"), I'd favor a flat rate of say 10%-15% with zero deductions and adjustments. No mortgage deduction. No IRA deduction. Everyone, everywhere pays a simple flat rate. There'd be no tax dodges. No offshore havens necessary. No, big, unwieldy, costly bureaucracy.

But politicians, regardless of party affiliation, love to dole out breaks and special favors. Tweedledum and Tweedledumber. If they can't hand out tax dollars to their favored constituents, why, there'd be little need or use for politicians. A return to the concept of citizen legislators, instead of a professional class of politician. Hmmmm. It can't happen, but it's nice to think about the possibility anyway.

Sorry for the rant. I'll be sidling over to the Political Asylum board now...

Rich
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Hi Rich ! (Rich here)

Equally unworkable and fanciful, but still my favorite, is a real flat tax. If I gotta pay taxes (hey! someone's gotta pay my salary although I'm reminded almost daily when I make a motor vehicle stop--"Hey buddy! Don't you know I pay your salary?"), I'd favor a flat rate of say 10%-15% with zero deductions and adjustments. No mortgage deduction. No IRA deduction. Everyone, everywhere pays a simple flat rate. There'd be no tax dodges. No offshore havens necessary. No, big, unwieldy, costly bureaucracy.

But politicians, regardless of party affiliation, love to dole out breaks and special favors. Tweedledum and Tweedledumber. If they can't hand out tax dollars to their favored constituents, why, there'd be little need or use for politicians. A return to the concept of citizen legislators, instead of a professional class of politician. Hmmmm. It can't happen, but it's nice to think about the possibility anyway.

Sorry for the rant. I'll be sidling over to the Political Asylum board now...</i

My sediments -uh sentiments -no, sediments exactly!

My Dad was a cop ... that's the way I was raised. Politics has no place in society ... society should be previlant throughout politics, though.
Three cheers for a flat tax...

I'm goin' over to the PA board with ya.

Rich
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From Rich - I'd favor a flat rate of say 10%-15% with zero deductions and adjustments. No mortgage deduction. No IRA deduction. Everyone, everywhere pays a simple flat rate. There'd be no tax dodges. No offshore havens necessary. No, big, unwieldy, costly bureaucracy.

Rich - this comes from someone who makes a decent share of his income from preparing tax returns, so while it may not sound objective, I hope you'll believe it's not just self-serving, but a simple income tax system would never work and would be the most abused and unfair system of tax (I label it "simple" instead of "flat" because "flat tax" really only refers to one tax rate instead of the brackets we have now - I believe people often use "flat" when the mean "simple" - heck, your tax isn't tough to calculate - as long your taxable income is under $100,000, just look the tax amount up in a table - you don't have to calculate anything). But as far as why a simple system would never work - what is it you would tax, anyway? Wages? Is that all? Fine, those who can (business owners) won't take a wage, they'll just pay themselves some other way - own the real estate, pay a high rent, loan the company money, pay a high interest rate, etc. Yes, the tax code is large and complicated in part because of the use of the tax system to achieve various political and societal goals, but the largest reason is that there a large number of smart people out there who will always find a way around the existing law, and I guarantee you that if the income tax system is simplified there will be a lot of people avoiding that simple tax, and the only ones paying it will be those who don't have the ability to be creative. Whatever you think that simple system should tax, I can tell you how it would be avoided, and by the time you fix every problem, you'll have the same code we have now.

The only solution, I think, is to get rid of an income tax all together and move to a sales tax, but that has its' own problems - I can't imagine some of my clients being responsible for collecting and remitting say $100,000 of sales tax on $500,000 of income. What a temptation there would be to keep some of that, and you'll still need an IRS - there would have to be a very real threat of an audit, or people would just pay over what they felt was fair and keep the rest. Again, I suppose I'm not entirely objective, but that just worries me - at least now those who have no moral objection to cheating the tax laws are somewhat stymied by w-2s, 1099s, etc., but with a sales tax of 17-20%, those who collect it who have no problem with stealing tax money could really have an opportunity to do just that.

But for now I guess I'll keep working all these hours for three months and keep trying to stay on top of all tinkering the politicians do with the system.

Jeff
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First, I graduated college in 1981 with a boatload of college debt(and worked summers as well as during the school-year), so college loans are not unique to the under-34 crowd.


All in the Family???

My observation is that kids within the same family vary widely in their money management. I've always been very interested in business and personal finance. I collected and traded everything from comic books to stamps. I ran ads in "Boy's Life" and searched out and hustled the "collector conventions". Had a paper route and cut many lawns. I had my own subscription to the Wall Street Journal in High School. My parents thought I was crazy. I have two sisters. One is reasonably prudent - a hard worker who saves grudgingly, but saves none-the-less. The other is financial basket case - despite years of personal budget counseling and intervention on my part.

I have three kids now. The oldest could care less about personal finance and budgeting. She spends her allowance almost immediately(mostly on books). I will say that she is a "cheerful giver" regarding our tithing requirement and has even offered her full allowance if needed. My second child is innately focused on business and finance. She dives for pennies and initiated the opening of her own bank account. When the monthly statements come she reviews them like a hawk and sighs about the minimal interest she is generating on her savings. She holds the tithe tightly in her little fist until reminded of the purpose and duty. Too early to tell about kid #3.

Anyway, nature vs. nurture?
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These same skills are highly prized in other careers so we don't get them all in in the teaching profession. And the teaching profession will pay about 50% of the salary that can be obtained in industry.

I'm curious, out of the people here who are aiming for financial independence, how many have considered teaching after the goal is reached? I know I've considered it.. not for personal finance, though that might be fun to do on the side.

Jimmy
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"I'd favor a flat rate of say 10%-15% with zero deductions and adjustments."

I'd be surprised if 10-15% of total income would fund our government, if that was the only tax. How much do we earn in the aggregate in a year? What is the total of federal, and all state, and local budgets?

My original thought was to do something to make it obvious how much each of us is paying for government.
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This is my first post at any of the Fool boards. I am very interested in teaching after I hit my financial independence goal. Not sure what subject: I think teaching preteens and teens about financial responsibility would be interesting.

Saving in Northern MN
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Hi Beth,

Welcome to the Foolish Collective and to The Motley Fool! We hope you'll stick around and either silently read or conspicously post or both. :)

Getting teens interested in anything always seems a challenge to me. Especially in something as long term as saving for retirement. That time is so far away they often don't think they will ever reach it. So why worry? Besides, it's a lot more fun to spend the money now and be as cool as all your friends.

Would a school want a semester-long course on finaces and financial education? I think it would be worth it, especially since you and the class could talk about most anything, since just about everything has an impact on or is impacted by finances.

Could be a very interesting course. Hope you have the chance to teach it.

gebin
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I'm curious, out of the people here who are aiming for financial independence, how many have considered teaching after the goal is reached?

I am thinking of teaching after "retiring". Sounds great. If it is terrible, I'll quit. But I like kids, so I think it will be fun.
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Hey all.. another newbie to the FC here :) -- I think quite a few of us are coming in through this thread.

Would a school want a semester-long course on finaces and financial education? I think it would be worth it, especially since you and the class could talk about most anything, since just about everything has an impact on or is impacted by finances.

Arizona used to have this. It was called "Free Enterprise" -- and went through many of the same things as have been mentioned here. My class (1997) was the first not to require it. I took Macro/Microeconomics instead. I almost went into Economics because of it.

Our teacher made her money in real estate and taught because she enjoyed it. I learned quite a bit about business acumen from her. However, I remember seeing some of her previous courses by chance (I had an after school activity in the room she taught in one semester) and many were bored stiff. Those with an inclination for the subject were bored because it was too basic; those who couldn't be bothered... well... still couldn't be bothered.
___

As for the flat tax - I've heard numbers of an 18/19% tax with a minimal deduction would be required. The problem is that most solutions ignore capital gains - whole classes of wealthy individuals would never pay taxes. That's great once you get there... but the money has to come from somewhere.
___

Back to topic (as I run out of time...) The sad truth is that it benefits us that do save to have those who don't save. We're the lenders, so to speak. The less saving and the more borrowing, the more interest rates go up. In the upper echelons, there is no motivation to stop such anti-productive actions.

Besides, in what would we invest if we didn't have Starbucks? :)
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One thing I've been thinking of lately is... what if we had a nation of LBYM Fools?

Who would buy the Lexuses? (Lexi? Lexusi?)
Who would buy the $600 shoes?
Who would eat out enough to Panera, Burker King, <insert 5 star restaurant here>?
AND DEAR GOD, WHO WOULD DRINK COFFEE AT STARBUCKS?

What would the economy of such a world look like...


What if we converted to an entire nation of LBYM Fools starting tomorrow, and EVERYONE began saving 10% of their income instead of spending it? Soon -- like about next month -- we would begin the damnedest recession since the 1930s. Consumer spending accounts for about two-thirds of the US national economy, so abruptly we would be producing about 7% more goods and services than people want to buy. Inventories would swell, prices would fall, unemployment would soon take a BIG jump. Business spending would take a big hit too -- companies whose revenues just imploded are always trying to cut back. State and local governments, highly dependent on sales taxes, would have a crisis that makes the last three years look mild. Depending on how dependent some of the export economies like Korea's are on the US market, we might drag much of the rest of the world down with us.

I think it would be very good for the US population to save more than it does, but we need to convert to that status slowly...
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The sad truth is that it benefits us that do save to have those who don't save. We're the lenders, so to speak.

The only troublesome part about being the lender is that one of the borrowers (a really BIG borrower) is the federal government, and they can print money. High inflation is good for borrowers because they can pay back the pre-inflation loans with devalued dollars, but lenders whose money is tied up in long-term arrangements get screwed.
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Those grasshoppers who presume entitlement without responsibility and without lifting a finger are going to need government thugs to pry my hard-earned savings out of my clenched fists. Congress will provide the aforementioned thugs.
...but if he doesn't listen, I want to be there with the resources to help him.
If he doesn't listen, there's somebody else in a comparable predicament who will, and that's who I'm inclined to help. If you give money to a spendthrift you're giving alcohol to a wino. That's no charity.
Throwing good money after bad makes no more sense in charity than it does in investing. If that tags me as cynical, so be it.


I totally agree with you, KennyO. Haven't we seen enough of people who deliberately choose a lifestyle that is destructive, knowing that the government, churches, SOMEONE, will bail them out? How can an injured person get stronger if he is carried from place to place, if he stays on crutches far past having been healed? Even in my own family, one of my sibs is too lazy to work, so the parents are planning to bail out his debts and send his kids to college, when DH and I have been doing everything independently all these years never asking anything from them. This is a microcosm of society, too, as people (my brother) now view the housepayments as an entitlement and use their meagre income for fast food and ordering beers all around at the oyster bar.
fang03
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<<So let's figure out a way to turn the country into a nation of Fools!

Remove "Shop" and "Home Ec" from the school curiculum and insert "Personal Finances". Make it a mandatory course that talks about everything from what everything means on a paycheck to what an IRA/RRSP is and the power of compounding interest. Make it a madatory class. Have people that have gone bankrupt come in and explain the issues they faced.

>>


I maintain there is no reason to suppose that will work. The prevailing value in the United States is consumerism, and if the schools were to teach personal finance it would be personal finance for consumers:

Ford Motor Credit presents the segment on "qualifying for that new car loan"


VISA Cards on "Getting that first credit card"

The local college on "Getting an education using students loans"



What makes you think frugality would ever get its nose in such a tent? Frugality is widely regarded as a deviant social value in the United States today.



Seattle Pioneer
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<<Retired January 1, 2004. Accumulated time payout made me "rich" again.

Cap
>


Heh, heh!™

My brother told me how his wife reacted when she retired as a high school vice principal and got paid for all her unused vacation time and sick leave. She had a pretty good idea of what that would amount to.

My brother said that when she looked at the amount on the check, she looked in the envelope to get the "other" check she expected to find there for the missing amount. The missing amount went to taxes that were deducted, of course!


They moved to Florida in 2000 from Maryland, where my SIL had been a dutiful Democrat-school administrator. My brother reported that she voted for George Bush and the Republican Party in the 2000 election, "because I'm on a fixed income now." I claim she almost elected George Bush President single handed..



Seattle Pioneer
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Frugality is widely regarded as a deviant social value in the United States today.

Along with the Pacific Mermaids Syndicate where there is no adult supervision :-)

Regards
Philip
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Re: All in the Family??? Anyway, nature vs. nurture?

Hello Eleven, and everyone! I'm a "trial" member, and this is my first post. This particular subject immediately caught my attention. I come from the "Dysfunction Junction" family. I am the eldest of three girls, in a home where only witty comments and the national news were acceptable topics of conversation -- WHEN we talked at all. (No touching either. No hand-holding, no hugging, and above all else -- NO kissing! Not on the cheek, not ANYWHERE!) Family meals? Non-existent. Except for holidays. During those meals, only the witty repartee and said national news (or local news, if it were important enough) were allowed. Never, ever was anything else discussed. There WAS punishment and the verbal abuse that always accompanied it, along with the physically inappropriate spankings. (Upon "mother's" request, my "father" would take me to my room, have me pull my pants to my knees, and then he struck me with his belt. Several times. Wordlessly, he left, and while I was crying afterwards, my "mother" would come in and say she was sorry that "they" had to do that, but that they "loved" me. I don't know if my "sisters" received the same scenario, because we never really spoke to each other.) Tears were frowned upon; I was ordered to "cheer up and wash up" before leaving my room and joining the "family" again -- or whatever part of it was there at any given time. Questions were considered annoying (and off topic), unless they pertained to homework. ("Straight A's" were mandatory.) Most importantly, we were never, EVER to speak of anything controversial or "icky."

As the eldest (who was uprooted the summer I turned thirteen, which I was TERRIFIED of doing [the "uprooting"] -- and for good reason, as it turned out), I never had ANY of "the talk(s)" that are considered "normal." My "sex talk" consisted of a series of five books which taught about the female reproductive system, and marriage, and having a family. Somehow, it neglected the subject of "sex" completely. I learned of THAT on bathroom walls at my "new" school. (NOT kidding.) Financial talks? None. Zip. Zilch. Nada. Like nearly everything else (except school subjects), I was supposed to absorb it by osmosis, I guess. Nobody told me how to get a checking account, how to balance my checkbook, or OVERDRAFTS! I taught myself, by "hit and miss." Same with credit, when the time came. Plus, my second husband was an alcoholic and coke abuser (I was too, for a few months, but I couldn't keep doing that to myself, so I quit). He kept using after I quit, and stayed out partying after work (he was a songwriter, signed with a publishing company, and he was paid "advances" on work yet to come). He was an ESTABLISHED hit writer before that happened, though. We were still far from wealthy, but I felt that we were in good financial shape. (I didn't ASK, though. I had learned NOT to!) We lived paycheck to paycheck. I handled all the finances. But HE HAD my credit cards (in MY name only), and he used them. When I took them from him while he was sleeping, he started withdrawing hundreds of dollars a night (two or three times per week) from the ATM for his partying. (I was left home, with NO phone call EVER -- pacing, every time.) Often, his coke withdrawals clashed with checks for bills I had just mailed out. Our account bounced by MANY checks. Once, it bounced 22 checks -- one right after the other. He also "borrowed" my car (his needed work), and even though I TOLD him that it needed to be "babied" and he couldn't treat it as roughly as he did his Corolla, he let the oil run dry, and as he was driving it, it threw a rod and cracked the engine block. He DESTROYED it, and it wasn't even paid for yet! (It was in my name ONLY, again.) The car was towed, the bank took possession and sold it for scrap, and I still had two years of payments left on it.

I didn't know anything about credit, and had NO CLUE that I would be held solely accountable, while he filed for divorce and got off scott-free -- for the drugs bought on my credit cards, the money I borrowed from friends to cover bounced checks and the bills that still needed paying, AND my car. He wound up writing a huge hit for Reba four years later, and releasing his own CD on Sony/EPIC at around the same time. He had remarried, and so I saw none of that money. NONE. My "sisters" got to watch me forging ahead blindly my entire life, and hitting EVERY pitfall there was. They learned from seeing me face down in the mud, and completely out of options. They avoided the pitfalls I fell in, and were severely careful about who they married. I relied on "true love" and earnestly followed my heart (time didn't matter; I LOVED HIM! I still do. . .), and got burned. My "perfect sisters" each married the FIRST guy they ever dated, after YEARS of dating. I almost got my credit back up to par, but right after my bankruptcy was discharged and I was nearly "good on paper," I found out that I had Arnold-Chiari malformation which required (brain) surgery, so I had to quit work. I had a second brain surgey, which turned out to be unnecessary, and I am suing "my" neurosurgeon for leaving me disabled and bedridden. (I am not alone -- over 25 of his former patients are suing him. Plus, he's lost every medical license in every state he'd had one in. BUT! My second surgery was performed one lousy month, to the day, BEFORE he had his medical license summarily suspended.)

Now I am still broke (Social Security disability is my only income, and it's laughable), my credit is still lousy (worse, from medical bills that Medicare/Medicaid didn't cover, and I could NOT afford to pay), and my insurance is paying for less and less of my treatment and medications. I was raped when I was 21, and got an infection from a STD, which scarred my fallopian tubes -- so, no children. I have cried myself sick over that. I still do, especially right around this time every year. My "mother," who is (laughably) a parish nurse (an RN and ordained Methodist minister!) never thought my pain was real, never thought I had anything REALLY wrong with me, and she told ALL of my "family" so. They all listened to the supposed "expert," and didn't even ASK ME OR MY DOCTORS! I had been living in an apartment over my "parents'" garage, but when I became symptomatic, I got ZERO sympathy. (I got YELLED at, for calling in sick too often, by THEM!) My very NEW boyfriend said I could move in him with him, and when he saw the shape I was in, he told me to quit work before I killed myself. I did, and thank HEAVENS he has been nothing but wonderful to me. He can't hold a 9-to-5 job, because I need him, and so does his mother with Alzheimer's (she is his only living relative now). He plays gigs on weekends often enough (I am alone while he's out of town the whole time), and he tunes pianos during the day, so he can make his own schedule, pretty much. But he is VERY busy, with a lot on him. Thankfully, his father was very good with money and investing, and TAUGHT HIM to be as well. Otherwise, we would BOTH be in trouble. HIS mother helped us (me) some, when she wasn't so ill, but MY "family?" Nothing. No financial help, no physical help -- not even EMOTIONAL help! Thanks to "mother," they all think that I'm either "faking" or "exaggerating." I hadn't seen them in about six years, and had rarely spoken to them ("us Johson women just don't like talking on the phone!") (Oh really? Must be a NEW phase!). All that was left for me to do was "divorce" myself from them ALL (I got no gifts for Christmas or my birthday, and I didn't get thanked for the gifts I gave them every year; the gifts weren't even ACKNOWLEDGED!). I kept hoping, but realized that it was time to stop hoping. My "mother" is very self-centered, and very materialistic, and spends above their means, to "keep up" with her sister in Mississippi. She's got everyone else ensnared in her nonsense (my wimp "father" allows it all), and now she's teaching her grandchildren to be the SAME way. Still, my "sisters" are WONDERFUL for not following me into pitfalls, and for "marrying well" -- while I am "lazy, useless garbage!" When I could get THEM backstage at the Grand Ol' Opry with THEIR friends, and into a recording studio during sessions (with different celebs while my late husband sang background), I was STILL "wonderful." Now that I can't, and since I have no children, I don't even EXIST to them. I have been on a WAITING LIST for YEARS (government service) for nursing and personal grooming help because NO ONE in my "family" (especially not "mother," who does the EXACT same thing for a LIVING!) would ever/will ever help me!

I had a "parendectomy" about 1 1/2 years ago, and my "sisters" soon followed. We are irrevocably estranged. It hurts, but I don't WANT them in my life the way they are. My "parents" have NO CLUE as to how screwed up they are, and my "sisters" are happy not to "rock the boat." (They get babysitting help and all, naturally!) ("Take a stand for Sharon? Sharon WHO?!")

Nature or nurture? I know how I'd answer that question!!

~Namaste~
Sharon

P.S. Sorry this became SOOOO LONG!
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Jordan,

Allow me to thank you profusely for the deserving "grasshoppers" who find themselves suddenly living hand to mouth -- stressed to the gills over whether to buy themselves medication or food -- by no conscious fault of their own. Many people DO find themselves in a financial position that they are in no real position to change. (For instance, the young-to-middle-aged, bedridden women with no nest egg, and no idea as to how they COULD have built one, whose only remaining hope is to write the "Great American Novel!") (Wish me luck?!)

;-}

~Namaste~
Sharon
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Hi Sharon,

Welcome to the Foolish Collective!

You show remarkable courage considering all that has happened to you. I doubt if I would have survived had I experienced a tenth of the turmoil that you encountered in your life.

Consider The Foolish Collective your family. And I wish you luck on your "Great American Novel". I have a feeling you could write a really great one.

tom
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Beep62 -

All I can say is "Wow"... Along with a day-job I'm a singer/songwriter(If you've seen "Spinal Tap" then you get my Foolish pen name) so I can relate to some of the history and imagery you've presented. As the stereotype goes, musicians and our industry ilk are some of the worst money managers on the planet. Extremely short-term focused and stardom is just around the corner("I'll be a star tomorrow, but today, I'm a Nashville bum"). The "standard" industry contracts are some of the most one-sided agreements in the business world, yet most musicians sign them without reading/without counsel and "live large" on the advances that are simply accruing debt ... sigh.

Anywho - focus on your health and well-being. Don't let the antics of your mom disuade you from a relationship with your creator(not a sermon, just a thought). You're certainly in my prayers.

Also, one of my best friends had a large brain tumor removed one year ago ... he's now doing wonderfully, I wish the same for you.


A firm financial foundation simplifies the remaining difficulties that we face. Stick around, there's lots to learn.


Regards, 11
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Thank you, Tom! It has not been a smooth ride, although there have been some bright spots. (And some VERY bright spots!) Still in all, I believe I'd trade everything good in my past for a chance to "do it over and do it right."

I definitely NEED a family! Thank you for that, and thanks for your kind words about my chances of writing that one BIG novel! *grin*

~Namaste~
Sharon
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Hello Eleven! (I thought I caught that. . . *grin*)

Thank you for everything, and especially for believing me (about the music business stuff; both husbands were/are in the business, my former brother-in-law is BIG in the business, and unfortunately, my second husband died of cancer in 1996 which kept his lifelong dream from taking off as it should have). Many people think I'm blowing smoke (quit well over a year ago! *grin*), so I've learned not to expect it. My current fiance/boyfriend/? (he won't marry me while my "parents" are still alive, and I don't really blame him) is a musician as well. I used to be in the business (I've been singing and playing instruments and writing ever since I was little-bitty), and while I HAVE tried to have relationships with non-musicians, it just doesn't work out. They don't "get" me. I don't "get" them. Guess I'm "stuck" with musicians, although the curent one is eligible for Sainthood, as far as I'm concerned.

As for musicians not being "up to snuff" with financial aspects and contracts -- I got suckered myself, by my own husband. (The one who's deceased, so I don't like to talk ill of him; I just try to stick with only the truth and leave the bitterness out of it.) We wrote songs together a LOT, and Keith submitted some of them to Tom (Collins) when he needed to "fill his quota." MY name was left off the credits, though. One of them, which WAS my idea from concept to hook to title (and I wrote nearly all of the lyrics) was recorded by "Babs" Mandrell (album cut with no hope of release as a single, on a less than stellar "Babs" album). Keith NEVER wanted me in the business after we married, and he wouldn't put my name on the song even after it was picked up. (I think he didn't want to have to tell Tom that he needed to share songwriting credits with his wife!) So, I've had a song recorded by "Babs" Mandrell that no one knows about but me. (My "family" has never believed me, and Keith isn't around to ask anymore.) (No, not Keith Whitley, although I did know him, and Keith W and Lorrie Morgan were married on the same day, at the same time, as Keith P and I were! Weird, huh?!)

In the "believe it or not" category: My brother-in-law from my first marriage (first husband's brother) played guitar on the CD recorded by my second husband. Too weird for me. . . . *grin* My first husband isn't doing too badly either. When we were married, he drummed for Jimmy C. Newman on the Opry (and on the road, which was relatively rare for them). He is now playing guitar AND drumming for his idol (his dream job), as a member of Merle Haggard's band. (Merle uses his road band in the studio as well.)

Anyway -- enough yapping about me! I hope I can figure out a way to stay on the boards after my free trial. I've been doing the numbers, and I just don't see how I can afford to stay. (My only income is $700 per month from SS disability, and the occasional poem or short story I sell.) I am QUITE broke at the moment, as we are working on repairing the damage caused by someone stealing my Visa debit card number and putting me in the hole by over $500! Add OD charges, and it was a SIGHT! The bank is working with me, I've reported it to law enforcement, and I've added yet ANOTHER firewall! (I don't fall for those phony eBay emails and give out my info in emails or links, unless I go to the https link on my own first!) I don't know how in the WORLD anyone got my number! (Number only, and not the card; it was used only for Internet purchases.) I only use encrypted sites when sharing pertinent info!

Everyone has suggested that I not do anything "financial" via the Internet, but since I am bedridden -- I do EVERYTHING by the Internet because I have no other choice. Bob has ENOUGH on him to add doing my shopping and my bill-paying and my banking for me! I've been shopping via the 'net since its inception with no credit card theft before, so I have a fairly decent average. This was a fluke. But I'm still mad as a hornet!!

Thank you for the good wishes regarding my health, but I'm afraid that I am only going to deteriorate from here on. The last surgery was a nightmare, my cerebellar tonsils and surrounding brain tissue were cauterized, and I have severe neurological damage -- along with the pain. I DO have a wonderful holistic pain management specialist, but he's in Cincinnati, so we have to rent a car, stay in motels, eat out, buy gas, pay the doctor (insurance doesn't cover him), board the Bassets, and Bob has to miss work every two to three months. It's not cheap. But there is NO doctor in Tennessee who can or WILL give me the help I need. Dr. B is the closest, but at least he's the BEST! I adore him and his staff! My insurance has stopped covering almost ALL of my meds, and I've gotten overrides for four of them so far, but am still doing without some of them. (Some "overhaul" of TennCare! STINKS!)

Okay, I will REALLY stop bending your ear now! Thanks so much for everything! If I cannot stay on as a member here, perhaps we can still keep in touch? I hope so!

~Namaste~
Sharon
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P.S. to Eleven:

How in the WORLD did you know about my current spiritual state?? Are you psychic or what?! (I didn't post anything about it, I'm pretty sure!) Spooky! (Atlanta Rhythm Section!)

;-}

~Namaste~
Sharon
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Hi Sharon -

You are most welcome!

I guess that my thoughts on this come from a combination of my faith and my background. I remember when I had to raid the rubbish bin at the neighborhood high-end market (we lived on welfare, but in Laguna Beach, CA - a very pricey community) to get food to fill out the pantry.

Take care and may the Great American Novel go well!

Yours,

Jordan
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Hi Sharon,

You are Welcome!

You will find the Foolish Collective a great place to share ideas. And we really are all friends here. I have met so many great people here, though, I have never actually seen them.

We have a lot of good writers here too. I notice on your profile you are a free lance writer. What topics do you write about? Do you like writing about stocks or stock market related subjects?

I have been trying to improve my writing, but it don't come naturally to me.

Make your self at home!!

tom

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Hey Jordan!

That is still an extremely wonderful thing to want to do. I've always wanted to get rich so I could help people who have fallen through the cracks. Most people don't realize that churches and the Salvation Army and the Shriners, etc., aren't neverending sources of money in times of need; I have tried to get help from almost all of those "sources" at one time or another, but the usual response is, "we don't help individuals."

Before my "mother" became an ordained minister at the church they attend (and where my mentor of 25 years USED to be; he's been promoted elsewhere), I could ask for help and get it, from their emergency fund, IF the money were there. That fund no longer exists -- at least, not for me. What NONE of the "ministers" who are there now (including my "mother") know is that I ALWAYS repaid the money, even though it wasn't required, and whenever I got a big check (such as my retroactive disability check), I gave 10% of it to that church. Unlike many people I've heard, I didn't broadcast it because I didn't do it for love or admiration or WHATEVER it is that makes those people broadcast it.

Even after I was downed by the Chiari, and making NO money, I would help people even LESS fortunate with any of my disability money I could spare, or raise elsewhere. The archives of sfpnn.com give a running account of all my attempts to raise money to help a child with Chiari and a VERY badly botched surgery for it. Her family was in dire straits, and they found (as I have) that charities don't help "individuals!" It broke my heart. People started complaining to the editor about my column concentrating too much on the family in need, which made me angry, but I stopped. I wrote one last column expressing my disgust, though, before I dropped the topic from the column.

Anyway -- I really DO want to become wealthy, somehow, to help people like them. And now me, I guess. Our governor is making life horrible for me by all the lousy changes he's made in health care for the disabled and broke! We are getting less and less medical help as time goes on! (I thought Democrats were supposed to be the HUMANE ones?!!)

Oh well, maybe -- in time -- other people with money will come to see the situation as you do! I can only hope. Many more disabled people are falling through the cracks as dreaded "individuals" all the time.

Once again -- I thank you! And thanks for the good luck wishes for that book!!

;-}

~Namaste~
Sharon
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Hey Tom!

I wanted to see what was going on here, to see if I could actually learn anything! I'm on a trial subscription that, unfortunately, I don't see how I'll be able to keep. The money simply isn't there. I wish it were, because the people on this board are the FRIENDLEST I have EVER seen! Even so-called "Christianity" boards were full of nasties! I have a feeling that when I have to unsubscribe, it's going to hurt like mad.

Write about stocks? Oh heavens -- I WISH! I know nothing about finances except what I've learned in the past seven years from my fiance and from Dave Ramsey! I do write mostly non-fiction, though. Short stories, articles, poems, songs ("Babs" Mandrell recorded one I wrote with my late husband), and I'm looking to write that "Great American Novel!" (I really am; I have the concept in my head, but I'm still too busy crashing and burning and hurting and suing and purging and crying [I'm trying to stop that last one!] and mess like that to write anything worth reading. IMHO.) My guts are all over my page at AuthorsDen.com right now. It's kind of recording the process as it happens. (It's EXHAUSTING!) When I'm finished making a mess, I'll start on that book! *grin* (And if I ever learn anything worth telling people about, regarding stocks, you'll be the first to know! I promise!!)

Many thanks for the welcome! I will make the most of the time I have left here -- I know that much! You are ALL so wonderfully kind!

~Namaste~
Sharon
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ACK! TYPO! Make that, "FRIENDLIEST!" I cannot believe I did that! A storm front is moving in, and my fingers are typing against their collective will. They are MAD at me, so I guess I'll give them a wee rest! (Sorry about the extra postage [*grin*]; I cannot STAND letting typos get past me!!)

~Namaste~
Sharon
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Hi Sharon,

We are glad you decided to spend some of your trial time with us. Hopefully, the money will roll in when your novel is written.

You were lucky you missed our resident "nastie".
Philip (Tmfadmiral) was gone to England on vacation. hehehe

No, I was just kidding, I want Philip to read that though when he returns. hehehehe He been doing a lot of traveling, from Canada to Fool's headquarters in Virginia and now to England. He has family in England; he lives in Canada.

www.sec.gov is where one can find SEC filings on different companies. They contain 10K (annual reports and quarterly reports) that go back 10 years on most companies. A 10k will just about tell you everything you need to know about a company. It will discuss in detail facts about their business, risk factors, competitors and if you go back far enough you can piece together quite a history about the company of interest.

You might find that a really good place to explore some writing options.
One of my problems with writing, besides lots of typos, is lack of creativity. In other words, I like studying the history of different companies and if I decide to write about those companies it comes out reading quite dull and lifeless.

I love reading the Motley Fool takes. What I like most is that these approximately 800 word articles are fun to read besides being informative.

On the home page you will see the listing under "The Motley Fool Take"
http://www.fool.com/index.htm

There are about 15 different Takes each day. Many are written around important news events specific to the company. The Take on Nike is written around the news that Foot Locker agreed to buy 350 Footaction stores. I thought David Meier did a good job of taking a pretty dull news event and turning it into something fun to read.

I particularly like his opening paragraph.

Companies continually look for ways to establish an advantage. In the continuing saga between Foot Locker (NYSE: FL) and Nike (NYSE: NKE), a simple press release reveals a great deal about how Foot Locker looks to gain a little leverage over Nike.

Continuing saga sounds so neat and yet that is something that would never have come out of my brain. Being able to write and make a somewhat boring subject a bit entertaining and colorful is something that will always elude me.

Then another obstacle for me is the English language. I have been asked if English was my second language. And the inquirer was not being unkind. He really believed it was. In my defense, it was on the Word, Word, Word board which is filled with people that have a really good command of the English language. They can answer any question concerning proper usage, punctuation and I have seen them write very interesting posts about the origins of different words that was fun to read.

I spend a lot of time reading that board over the last few years.

I like to write and thanks to the Word Word Word board, if someone laughs; I have the perfect reply. I can always say that English is my second language and that I am really really really good at French. hehehehe

tom




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Bonjour Tom!

Ah, ainsi vous sont Français? Cela explique tellement! Mon père maintenant-aliéné est un professeur français, et il prend à un groupe de ses étudiants à l'Europe tous les deux ans. J'ai été là aussi bien, mais j'aime la Grande-Bretagne tellement beaucoup mieux. Aucune offense à vous, naturellement!

Merci -- thank you -- so very much for all the information! I'll make sure to copy and post that to Word, so I won't lose it!

You know, I really don't know HOW I am able to write about "dull" subjects and make them sound interesting. In fact, I never really know when I've written something that will "blow people away," until it does! I guess that particular talent is about the only good thing I got out of my DNA! (On my "father's" side.) Plus, I seem to have been blessed with a photographic memory about SOME things -- alas, not all. . . . A very strong grasp of phonics was instilled in me when I was very young, so that helps in many ways. In fact, when I was six years old, I taught my three year old sister how to read. Everybody was stunned, with both of us! (Ah -- the "good old days!")

I believe I should check into the "Word Word Word" boards! Sounds intriguing!! You've given me a lot of tips, and even some confidence-boosters! Thanks so much!!

If you ever want to seriously look into writing, I highly recommend "Writer's Digest." They have a website, as well as their magazine, writing courses, and yearly "Writer's Market." Check them out here -- http://writersdigest.com (I learned a LOT from them, especially from the course I took by mail!)

Thank you again, for all of your help! "Vous êtes très gentil, et j'apprécie absolument tout!"

~Namaste~
Sharon
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Hi Sharon,

I appreciate the link to writersdigest.com. I will definitely check into it.

Let me know how you like the Word,Word,Word board.

tom

PS I don't understand a word of French. It is just an excuse to explain my bad command of the English language. hehehe



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I appreciate the link to writersdigest.com. I will definitely check into it.

Good! Let me know how you like it?! *grin*

Let me know how you like the Word,Word,Word board.

I'm afraid I would run across too many people I'd rather not see there now. I've already emailed AND called TMF, so I may be a non-member later this morning. But you have my email addy! Feel free to offer it to those who'd like it on the "Musician/Guitarist/etc." threads! (If in doubt, email me and ask if "so-and-so" can have it, and I'll let you know! Songster0 definitely can have it!) But thanks for the tip!


PS I don't understand a word of French. It is just an excuse to explain my bad command of the English language. hehehe

I know! That's why I wrote it! (Teehee!) It doesn't really say much at all. I also had to get a bit of help with my tenses on another board. If you go to www.dictionary.com, you can translate English to French (and various other langages) and vice-versa! It's not 100% accurate, but it's close enough! (Only a fluent user of the language would likely spot the errors.) Have fun with it!! *grinning like a goof!*

~Namaste~
Sharon
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Hi Sharon,

I placed your French in the translator and it gave me the meaning in English. The translator is really fun. I am glad that you shared it with us. I hope others will try it out.

I often see posts written in other languages, I can now see what they are saying. Very fun!

I've already emailed AND called TMF, so I may be a non-member later this morning.

I am sorry to hear that, but I do understand.

I will definitely give your email to any ones interested in music. Even after you unsubscribe it might be possible for those to email you through old posts. maybe? I am not totally sure about that, though.

tom
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After a brief skim of responses, appears no one else came to the conclusion that there are just a lot of poor people out there.

Take a bus ride on the poor side of town. For whatever reason, huge numbers of people are in NEED; as many more need to spend everything they have.

This is not a rant for better programs, or political solutions, although I think there is a place for them.

It just costs a lot to be presentable, decently dressed, take the bus, pay the doctor bill, keep your teeth, etc etc. Most adults have to rent an apartment, when a room in a boarding house, presumably cheaper, might make sense but is unavailable. You can't save much money making your clothes, because fabric, thread, buttons etc are expensive - I've checked on this. Add in the phone, TV [no cable!], electricity. Checking account? $10/month, please - significant if you have to pinch pennies. Or use Check Cashing, and be gouged?

But really, can all the Fools be unaware how many are poor? Working, honest people with dead-end jobs and no insurance? Crooks, drunks, ex-cons, sick people?

To me, it underscores the need for Social Security.

Deac
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To me, it underscores the need for Social Security.

At least for me the debate isn't having Social Security or not having Social Security - it's what is the best form for Social Security to take?

Regards,

Eldrehad

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Deac,
To me, it underscores the need for Social Security.

My personal, educated, opinion after studying the current social security system is that it is more likely a primary cause of poverty rather than a solution to poverty. Don't get me wrong - I am in favor of some sort of mandatory salary reduction based retirement program, but the current social security system? A terrible program, structured horribly.

Consider the costs to the working poor:
1) Social Security is a tax on first dollar earnings. There are NO 'standard deductions' for Social Security taxes. The working poor, those who can least afford the taxes pay more Social Security tax than any other taxes.

2) Social Security taxes are taken out before 401(k), 403(b), Deductible Traditional IRA, or other employee retirement contributions can be made. Say a working poor person wants to better his or her future and contribute to a retirement plan. That working poor person must first pay social security taxes on the money going to that plan. If that person can barely afford to make the contribution in the first place, the social security taxes don't make it any easier.

3) Social Security contributions/earnings are not really 'owned.' Say a working poor person dies at age 66, just before being fully retirement elegible. His or her (adult) children might get a tiny death benefit, and that's it. His or her spouse may be elegible for some benefits, but if that spouse is also social security elegible, the game changes. All the other money paid into the system? Sorry... It stays in the system. No lump sum distributions available, even at death.

4) Social Security taxes are extra costs of hiring the working poor. Since Social Security is a 'shared' tax between employees and employers, the 'employer' half of the tax is an additional business cost to hire that working poor person. Especially for low income situations, the marginal (extra) 6-7% cost of the Social Security taxes can often be a deciding factor for whether a position is worth hiring or worth doing without.

5) Social Security gives a false sense of security. My grandmother and grandfather never saved for their retirement, because they believed (wrongly) that Social Security would provide their income needs in retirement, if they even lived that long to retire. (Remember, when Social Security was started, life expectencies were not much longer than the age 65 retirement/benefit age). Grandpa's dead, and the measly check that Grandma gets from the SSA is not enough to live on. I don't know how they were convinced that the program would provide for them, but they were. If I had to guess, I would guess that those expecting the most from Social Security are those who are also doing the least for their own retirements and also those who are most likely to be harmed when they retire and find out that the benefits are small, poorly indexed to an individual's cost of living increases, and are not going to pay the rent in twenty years.

Please don't get me wrong - I am in favor of some sort of mandatory salary reduction based retirement program, but the current social security system? It causes more harm than help.

-Chuck
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I give to each person that asks from me until I run out

Great post. St John Chrysostom, in a 4th century letter, advises with dry humor that we are relieved of the responsibilty of determining whether the recipient of our alms is worthy or not.

Of course they drink. No family, no future, no job, no hope - drink might be the one comfort.


I carry a few bucks too.

Deac
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Hi Deac -

Sounds like we have similar values and ethics on this front. Glad to meet a fellow traveller...

Shalom -

Jordan
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True, if one saved $30 per month nominally. You are not accounting for inflation here though, so that $30 in the first month some 40 years back would be, at 3% average inflation, much closer to $100 in today's dollars. Assuming a nominal 4% interest rate and average 3% inflation rate, that makes the inflation-adjusted return rate only 1%, which means that to get to $35.5K at the end of 40 years one would have to have saved closer to $60 per month in today's dollars to get there. Still, though, your point is the same. $2/day is still less than a lot of us spend at Starbucks on the way into work.

I believe the inflation rate has been approx. 4.4% over the past 43 years, not 3%, so the $2/day should be higher.

Let's deal with some real numbers to see how it goes--I'll use numbers from my first full-time job, about 37 years ago. I made $84/week gross. From that was taken SS, Federal Income and Local Income Tax. I don't have the paystubs anymore, so I can't tell you what my tax rates were (but I definitely paid taxes!). I paid $115/month in rent and about $30 in utilities. I had no paid sick days or personal days, and only got paid vacation after 2 years. So, if I took a day off, I did not get paid for that day. $30 saved per month would have been 25% of my monthly housing expense, or 8.3% of my gross, and would have to be saved from after-tax dollars. Is that $2/day you spend at Starbucks 8% of your gross income?--I doubt it! Most of the young folks today aren't putting away 8% of their gross in pre-tax dollars!

There were no money market accounts, 401Ks, IRAs, Roths, or discount brokerage houses. The easiest and most commom place to put small amounts saved was a savings account. IIRC, savings accounts at that time were paying between 3 and 4%--not the elusive 7-10% often used in 'estimated' calculations. Therefore, whatever the lower income folks did manage to save was not even keeping up with inflation.

In short, that explains why the average net worth of many older folks is so low. Given all the tax advantages the legislators have built into retirement investing over the years, it's a shame that our young workers aren't taking advantage of them. Unfortunately they (like all of us) are subject to a constant stream of advertising and marketing on TV, on the web, in the print media, etc. which transform desires into needs, extoll the virtues of 'easy' leverage and credit, and transform the value of saving into 'get-rich' investing schemes.

How do we create a nation of Fools?

Perhaps we would be wise to enforce the 'public service minutes' broadcasters are supposed to adhere to (and don't), and to require that each broadcasting station run a 60 second spot-ad once each hour during prime-time. The ads could show destitute folks wandering the streets of a matrix-like future world and eating from garbage receptacles--accompanied by an announcer, "You think this won't be you? Better get real!" Followed by a big number centered on the screen, i.e. $200,000 and the announcer saying, "If you're 40-45 years old and you don't have this amount already saved in your retirement account, say hello to your future", then a quick shot back to future world, followed by a black screen with white letters, "Better get real." They could make different endings with different numbers for different age groups. Maybe that would wake people up. Maybe they're afraid to do it because they think it might panic people. It should, but most likely wouldn't!

2old
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